[Senate Hearing 110-1104]
[From the U.S. Government Publishing Office]
S. Hrg. 110-1104
LOCALISM, DIVERSITY, AND MEDIA OWNERSHIP
=======================================================================
HEARING
before the
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
__________
NOVEMBER 8, 2007
__________
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Transportation
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SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED TENTH CONGRESS
FIRST SESSION
DANIEL K. INOUYE, Hawaii, Chairman
JOHN D. ROCKEFELLER IV, West TED STEVENS, Alaska, Vice Chairman
Virginia JOHN McCAIN, Arizona
JOHN F. KERRY, Massachusetts TRENT LOTT, Mississippi
BYRON L. DORGAN, North Dakota KAY BAILEY HUTCHISON, Texas
BARBARA BOXER, California OLYMPIA J. SNOWE, Maine
BILL NELSON, Florida GORDON H. SMITH, Oregon
MARIA CANTWELL, Washington JOHN ENSIGN, Nevada
FRANK R. LAUTENBERG, New Jersey JOHN E. SUNUNU, New Hampshire
MARK PRYOR, Arkansas JIM DeMINT, South Carolina
THOMAS R. CARPER, Delaware DAVID VITTER, Louisiana
CLAIRE McCASKILL, Missouri JOHN THUNE, South Dakota
AMY KLOBUCHAR, Minnesota
Margaret L. Cummisky, Democratic Staff Director and Chief Counsel
Lila Harper Helms, Democratic Deputy Staff Director and Policy Director
Christine D. Kurth, Republican Staff Director and General Counsel
Paul Nagle, Republican Chief Counsel
C O N T E N T S
----------
Page
Hearing held on November 8, 2007................................. 1
Statement of Senator Cantwell.................................... 7
Statement of Senator Dorgan...................................... 1
Statement of Senator Inouye...................................... 9
Prepared statement........................................... 10
Statement of Senator Kerry....................................... 5
Statement of Senator Lott........................................ 7
Statement of Senator Nelson...................................... 3
Statement of Senator Pryor....................................... 54
Statement of Senator Smith....................................... 6
Statement of Senator Snowe....................................... 8
Statement of Senator Stevens..................................... 4
Statement of Senator Thune....................................... 50
Witnesses
Blethen, Frank A., Publisher and CEO, The Seattle Times.......... 14
Prepared statement........................................... 15
Articles, dated September 9, 2007, from The Seattle Times,
entitled
``Fasten Your Seat Belts: Full-Speed Media Ahead'',
``Democracy, The Press at A Critical Juncture'' and ``Do we
Currently Have a System That Would Make our Founding
Fathers Proud?''.......................................17, 18, 19
Articles, dated September 10, 2007, from The Seattle Times,
entitled ``Failures of the American Airwaves'' and
``Dispersed Media Ownership Serves Democratic Values''..... 21
Articles, dated September 16, 2007, from The Seattle Times,
entitled ``Build Broadband'' and ``Free the Internet''.....22, 23
Article, dated September 26, 2007, from The Seattle Times,
entitled ``The Local Voice of Radio has Been Muffled by
Greed''.................................................... 23
Article, dated October 3, 2007, from The Seattle Times,
entitled ``FCC Fiddles While Nation's Broadband Falls
Behind''................................................... 24
Articles, dated November 4, 2007, from The Seattle Times,
entitled ``Headlong Into the Murk of Media'' and ``Defy
News Corp.''...............................................25, 26
Goodmon, James F., President and CEO, Capitol Broadcasting
Company, Inc................................................... 32
Prepared statement........................................... 34
Lavine, John, Dean, Medill School of Journalism, Northwestern
University..................................................... 36
Prepared statement........................................... 38
Nogales, Alex, President and CEO, National Hispanic Media
Coalition...................................................... 10
Prepared statement........................................... 12
Winter, Timothy F., President, Parents Television Council........ 26
Prepared statement........................................... 29
Appendix
Letter, dated November 7, 2007 to Senators Daniel K. Inouye and
Ted Stevens from Jean M. Prewitt, President and CEO,
Independent Film & Television Alliance......................... 67
National Association of Broadcasters, prepared statement......... 59
Response to written questions submitted by Hon. Frank R.
Lautenberg to:
James F. Goodmon............................................. 70
Alex Nogales................................................. 68
Timothy F. Winter............................................ 69
LOCALISM, DIVERSITY, AND MEDIA OWNERSHIP
----------
THURSDAY, NOVEMBER 8, 2007
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10 a.m. in room
SR-253, Russell Senate Office Building, Hon. Byron L. Dorgan,
presiding.
OPENING STATEMENT OF HON. BYRON L. DORGAN,
U.S. SENATOR FROM NORTH DAKOTA
Senator Dorgan. We'll call the hearing to order this
morning. This is a full committee hearing on localism,
diversity, and media ownership of the Senate Commerce, Science,
and Transportation Committee.
Senator Inouye will be here in about 10 minutes. He is
stuck in traffic, which is a pretty usual condition here in the
Washington, D.C., metropolitan area. But, Senator Inouye will
be with us, as well other colleagues. I welcome my colleague
from Florida, to be with us, as well.
This hearing is a result of some testimony we heard
recently, that the Chairman of the Federal Communications
Commission was proposing to wrap up, by the end of this year, a
proceeding that would relax media ownership rules. We were
surprised, on this committee, by that. The announcement was not
made to the Congress, but, rather, inside the Federal
Communications Commission.
It is certain that a relaxing of the media ownership
restrictions is intended, by those who push it, to allow
greater concentration in the media. Now, I don't think there is
anything that either requires or encourages the relaxing of
ownership rules or limits. There's nothing that I know of that
requires it or even encourages it. I know of no one in the
country, let alone this room, who wakes up in the middle of the
night in a cold sweat and says, ``You know what? We've got a
very serious problem. We need to have much more concentration
in the media.'' If that person exists, I'd love to have a quiet
visit with them and propose some medication.
The fact is, we have galloping concentration in the media,
have had it for some long while--radio, television, and
newspapers. It has been galloping concentration in a manner
that I think is, frankly, unhealthy. We are now told by some,
and I am told by the chairman of the Federal Communications
Commission, that there needs to be additional concentration,
including cross-ownership opportunities with newspapers, and it
raises some very significant questions. Let me describe a few
of the opening questions.
Number one, the issue of localism and the issue of public
interest are both issues that are very, very important. A task
force on localism was begun 4 years ago, by then Chairman
Powell. There has not been a proceeding on localism, and the
task force itself has not completed its work, or the work on
localism was not completed. If it was completed, it wouldn't
have been a task force--or, rather, a proceeding, in any event.
A proceeding on public interest was started in the year 1999,
has never been completed. So, public interest--we're talking
about 8 years ago--a task force on localism--we're talking 4
years ago; neither of them completed. And now we are told that
the chairman of the Federal Communications Commission wishes to
march briskly to a December 18 date to develop a new rule,
which has not yet been disclosed, on relaxing ownership rules.
I think that is a horrible idea, one that is counter to the
public interest, but others will probably have other notions of
it, as well, and there is certainly room for some discussion.
I do think that proceedings must be completed first on the
issue of public interest and localism before one has any
opportunity to evaluate ownership issues. Now, I met with the
Chairman recently, and we talked about a number of things that
they are doing. The issue of reporting requirements by
broadcast operators, they are going to ask for much greater
reporting, because the reporting will tell them what is
actually happening with this increased concentration. But that
reporting doesn't yet exist, and so, the knowledge base or the
base of facts don't exist. And, in addition, I asked about
things like voice tracking. The answer was, ``We don't have
that information.'' I said, ``Well, wouldn't you need that
information in order to determine what has happened out there
in the panoply of radio- and television/newspaperland and the
concentration of ownership? Wouldn't you need to know those
things before you start trying to answer the question, `What
kind of a rule would we like with respect to relaxing
ownership?' ''--if, in fact, it should be relaxed at all; I
would take the opposite position.
The answer is, ``Yes, you need to know those things before
you even begin thinking about a new rule.'' One of the concerns
I have, and a significant one, is, there will be, it appears to
me, perhaps a month, maximum, for the American people to weigh
on a new rule that will be proposed for final action on
December 18. That doesn't meet any test of reasonableness or
any standard that I know that makes any sense.
I will be introducing legislation today, called the Media
Ownership Act of 2007. The bill will be cosponsored by myself
and Senator Lott, with Senators Snowe, Obama, Kerry, Nelson of
Florida, Cantwell, and Feinstein, and I expect we'll be joined
by other Members of Congress, as well. And we would call for a
90-day comment period on the actual rules, but, even before
that, we believe that there needs to be the completion of a
separate proceeding on localism, with 90 days of comment on
recommendations for improving localism.
First and foremost, do that, provide the requisite 90 days
before you even begin with respect to the issue of ownership
rules, which themselves should have at least 90 days.
The last time the Federal Communications Commission
attempted to do this, the U.S. Senate voted to block it, by 55
to 40, September 16, 2003, on a Resolution of Disapproval. The
Federal courts then stayed the rule. This, as you've heard my
description of who will introduce the legislation today, is a
bipartisan concern about potential actions of the Federal
Communications Commission, that will occur within the next 6 to
7 weeks, that will have substantial impact and consequences for
the American people. We need to get this right. And in my
judgment, the chairman of the Federal Communications
Commission, having not completed the proceeding on public
interest, having not completed the proceedings on localism, is
not in a position where he can credibly suggest we ought to
have a rule completed by the Federal Communications Commission
on December 18 dealing with media ownership. That is not a
thoughtful approach, and not the right way to proceed.
We will hear testimony from people. There's plenty of room
for disagreement here. I feel strongly, as you can tell, but
we'll hear testimony from both sides.
Senator Stevens, Senator Inouye has called, and is stuck in
traffic, but will be with us, I think, in 10 minutes to 15
minutes. Let me--and Senator Stevens--Senator Inouye just got
out of traffic--
[Laughter.]
Senator Dorgan.--and we welcome him here. Do you want to--
--
The Chairman. May I ask that my statement be made a part of
the record.
Senator Dorgan. Without objection, the statement of Senator
Inouye will be made a part of the record.
Senator Dorgan. Senator Stevens, you wish to defer to
Senator Nelson?
Senator Stevens. Yes, please.
Senator Dorgan. Senator Nelson?
STATEMENT OF HON. BILL NELSON,
U.S. SENATOR FROM FLORIDA
Senator Bill Nelson. Mr. Chairman, I feel strongly about
this, as you do.
And when you go back to the initial Act, it was 1934 that
Congress had passed the Communications Act, and it laid out the
principle that the Nation's airwaves belong to the people, and
that the broadcasters are the trustees of those airwaves, and
that they ought to serve the public interest.
Well, a lot has changed, and the technology has moved on.
And now, it's cable television, in addition to the
broadcasters, it's satellite radio, and it's television even on
the Internet. But one thing that hasn't changed is that the
airwaves still belong to the people, and the broadcasters still
have a responsibility to serve and respond to the local
community needs. And I feel strongly about this, and you've
already made reference to the fact that we have an
understanding that the Federal Communications Commission
Chairman Martin intends to call a vote, no later than December
18, on an order that may substantially relax or repeal some of
the current media ownership rules.
Now, I hope that the FCC will reconsider that plan. The
media landscape in this country has changed drastically in the
last 10 to 15 years, and I certainly want to examine the ways
of creating incentives for new media voices.
What I oppose, Mr. Chairman, is the proposals that will
allow one company or one consortium to control the media
landscape in the local community. Competition and diversity are
good. And competition, that we all extol up here in the private
marketplace ought to work with regard to delivering the best
product at the best price for the consumers of the media, as
well.
And I just want to give one example. People often point
out, ``Well, there is not a problem in Tampa, Florida, because
Media General owns the Tampa Tribune and also one of the main
TV stations, the NBC affiliate, Channel 8, WFLA.'' But what
they ignore is the fact that the Tampa Tribune is not a
monopoly of the newspaper market. That is a very competitive
market between the St. Petersburg Times and the Tampa Tribune,
so there is the competition there.
Go 90 miles away to Orlando, the Orlando Sentinel has a
monopoly in most of the Orlando market of the television
stations. And if you combined them, you would basically have
monopoly of the entire delivery of most of the news through one
particular ownership. And I simply don't think that that's in
the interest of the public.
Thank you, Mr. Chairman.
Senator Dorgan. Senator Nelson, thank you very much.
Senator Stevens?
STATEMENT OF HON. TED STEVENS,
U.S. SENATOR FROM ALASKA
Senator Stevens. Thank you very much.
You know, I've remarked before to this committee about my
experience with television, as a father of five kids, when I
refused to buy it until the mayor, who lived about three doors
down from me, came and told me that my kids were sprawled out
in his living room every time he came home, and why in the hell
didn't I buy a television? So, I do think that we ought to keep
in mind that it's still a changing entertainment world, still a
changing information world. Today, those kids could probably
watch even worse things than I had dreamed of on their computer
in their individual rooms. And we're dealing with such change
that, whether video is delivered from broadcast signal, a
storage device, or an Internet package, the policy issues
Congress faces are very diverse, but we do have to focus on
them.
Two very important issues are localism and diversity.
They're at the core of our country's values, and they should
remain the core of our communications platforms. But, at the
same time, we need to understand that those platforms are
changing. Just Tuesday, the latest numbers revealed that the
number of print subscriptions to most newspapers continue to
decline. Meanwhile, Internet advertising is soaring. I don't
think we know yet where that change is going to go and what it
will mean for people who communicate, know what it means for
people who try to find ways to own the entities that provide
the information stream. It's my hope that our committee and the
Federal Communications Commission will look at all of the ways
we need to pursue to preserve localism and diversity, and, as
much as possible, try to understand the changes in the
marketplace.
Thank you very much.
Senator Dorgan. Senator Stevens, thank you very much.
Senator Kerry?
STATEMENT OF HON. JOHN F. KERRY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Kerry. Mr. Chairman, thank you. And I thank the
chair of the full committee for helping us to move down this
road. I just have a brief comment I'd like to make, if I can.
We've been here before. There's a Groundhog Day component
to what's going on here. And I guess when I think of the FCC
chairman's recent comments on media ownership, we're all
reminded of Ronald Reagan's famous line in the debate, ``Here
we go again.'' We have a different FCC chairman, but it appears
that we are now headed down the very same ill-advised path,
which we all understand where it leads to.
In 2003, the FCC issued rules designed to loosen
restrictions on broadcast media ownership, and that decision
was met, thank God, with a public outcry and a backlash that is
rarely seen in the telecom and media world. And, in fact, the
Congress itself was emboldened to move in a sort of rare
repudiation--because it was then a Republican-controlled
Congress--in a repudiation of its own administration.
At the time, I wrote the FCC chairman, opposing those
changes, and several of us worked on a resolution to disapprove
them, and the courts eventually recognized the dangers of those
changes and pushed back.
So, fast forward, 4 years. We have a new FCC chairman, and
now we have a new attempt to consolidate media, even though we
have unfinished business at the FCC, business which Senator
Stevens just referred to, on localism and minority ownership,
which is critical to the overall mosaic of ownership and access
to media in our country. We have an insufficient process, at
this point, by which the public can even judge the changes
currently being proposed.
So, little has changed in the approach of the
Administration. I don't think that Americans are going to
accept, nor should they accept, excuses in the future about
unintended consequences that might come out of these changes.
People have already seen too much, and they know too much.
The FCC chairman has announced--I think, relatively
arbitrarily--that the Commission is going to vote on December
18. But what are they going to vote on? They haven't shared
their thoughts with us, specifically, on the changes they'd
like to make, or on the input that has been received regarding
those changes, or the potential unintended consequences. And I
think the FCC needs to know that that approach will not stand
and the Congress is not going to allow it.
These rules influence the competitive structure of the
entire industry, and they protect the public's access to
multiple sources of information. Changes need to be considered
with great caution and with diligence.
The ongoing proceedings that I've referenced are going to
impact the media market. The localism proceeding and the
proceeding on minority media ownership are topics that I've
followed very closely. Senator Obama and I wrote a letter
recently and introduced some concepts regarding it. But let me
just very, very quickly point out the key points.
Mr. Chairman, in cities with large minority populations,
such as New York, Washington, Atlanta, and New Orleans, there
is not a single black-owned television station. Not one. Since
1998, there has been a 40-percent decline in the number of
minority-owned broadcast television stations. So, who in their
right mind can look at this and say that this is an acceptable
direction to move in? Proceedings dealing with those very
issues have to conclude, and we have to provide concrete and
enforceable recommendations, before broader rules are
contemplated.
The FCC's first responsibility is to ensure diversity,
competition, and localism. It has no responsibility to
facilitate the business plans of a major network or any other
narrow economic interest. It has a public interest to respect
and to enforce. And there is no doubt that the rules with
respect to diversity and localism are going to have a very
significant impact on that.
So, we've seen the consequences before, Mr. Chairman, and I
think it's critical that, as the television industry continues
to consolidate, as a handful of national networks acquire local
stations across the country, that we guarantee that local and
independent voices are not lost. It's critical to the kind of
country that we are, and it's critical to the access to, and
flow of, information.
Senator Dorgan. Senator Kerry, thank you very much.
Senator Smith?
STATEMENT OF HON. GORDON H. SMITH,
U.S. SENATOR FROM OREGON
Senator Smith. Thank you, Mr. Chairman.
Listening to my colleagues, I'm--I share many of their
goals, and certainly recognize that localism and diversity and
competition are all valuable. And we ought to look for things
that we can do to facilitate that. And yet, we do it against
the backdrop, not just of competition, but superheated
competition, where so many of these traditional outlets,
whether they're television, newspapers, or whatever, they're
going under. They're going under. They're not profitable. And a
lot of these things are cross-pollinating, if you will, because
they have to, to meet a bottom line. And so, I think that is
really the challenge we have. But I share the goal. But we
can't demand the market perform in a certain way when the
economics aren't there.
Senator Dorgan. Senator Lott?
STATEMENT OF HON. TRENT LOTT,
U.S. SENATOR FROM MISSISSIPPI
Senator Lott. Well, thank you, Mr. Chairman, for having
this hearing, and for requesting this hearing. And I have been
pleased to join with you now in cosponsoring legislation that's
being introduced today on this important subject.
This is an area that I've been involved in almost all my
life and that I care very much about, and I'm very concerned
about what is at risk with the localism and diversity and
cross-ownership. I've expressed that. I joined you a few years
ago, when we introduced that Resolution of Disapproval, and I'm
prepared to do it again, if it's--if the FCC moves
precipitously, without carefully complying with the full
consideration of these areas of concern, and without some
action that has been thoughtful and carefully developed. And I
don't think they're there yet.
So--but, I think we did need--we're talking to the FCC,
we're hearing from the FCC. I think it's important we hear from
a different point of view. And so, I look forward to hearing
the testimony of these witnesses.
Senator Dorgan. Thank you very much.
Senator Cantwell?
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Mr. Chairman. And thank you
for holding this important hearing.
And I, too, share a lot of the beliefs that my colleagues
have expressed. And to my colleague from Oregon, who I respect
very much, I guess I would say, about this issue and the
consolidation that's happening in the market, is--a lot of
consolidation is happening, big players taking over smaller
players. And the one thing that I think our committee can do
best in the next era of the Digital Age in media consolidation
is to make sure that we look at the Constitution, and we look
at our constituents, and we think about how we are protecting
our constituents' rights and access to a diverse array of
opinion. And I think that will be challenged, since most of the
times our hearing rooms are filled with those who represent the
business interests on both sides of these equations, but I
think our constituents do deserve to have diversity, and that
diversity protected.
I'd like to thank the panel for being here today,
especially Mr. Frank Blethen, who is the owner of the Seattle
Times. It is one of the few remaining major dailies in the
United States that's independently owned, and owned by a local
family, and the newspaper has been publishing in Seattle, in
one form or another, for over 100 years, so they have been
unique in continuing to speak out on this issue.
I believe that ownership of the broadcast and print media
touches some of the most important American values: freedom of
speech, open and diverse viewpoints, vibrant economic
competition, and local diversity. And attention to that
diversity and localism has served America well in expanding
economic opportunity and energizing the civil discourse that's
so important.
Diversity and localism promote competition and choices,
even for advertisers. They create opportunities for small
businesses, for minorities, for women. They improve innovation
and find an outlet for a variety of voices. And I am troubled
that I heard press reports that Chairman Martin intends to wrap
up this current examination of the FCC's media ownership rule
by December 18. I ask him, What is the hurry? The last media
ownership public hearing is scheduled for tomorrow in Seattle,
and there was only 4 days of notice provided, so I certainly
support my colleague for calling into question this practice of
giving the public very little notice on this issue.
Is the public going to get ample time to comment on any
proposed rule before the Commission votes? There is a sense
that the die has already been cast in favor of increased media
competition, and that the new rules will eliminate the
prohibition on broadcast/newspaper cross-ownership and further
relax the local radio ownership cap. This is the wrong
direction.
Diversity in media energizes our democracy. The viewpoint
and program diversity is very important. Outlet diversity,
source diversity, and, as I said, women and minority ownership
diversity, makes us a stronger nation. And the importance of
localism--that is, producing some of this programming within
the communities so that the programming can be heard by the
community's choices--is critically important. And, while
increased media consolidation might be good for Wall Street, it
is certainly bad for Main Street.
So, I hope that at this hearing today, we can pay attention
to these issues.
I'd just like, Mr. Chairman, to point out one more
statistic. That is because I think statistics sometimes are
things we can all agree on and help us see a path. The cost of
radio advertising has nearly doubled since the 1996 Telecom Act
has passed. The Consumer Price Index has increased by 29
percent during the same period. So, in other words, while the
Consumer Price Index increased by approximately 3 percent over
the past decade, the annual growth rate of radio prices has
increased approximately 10 percent. So, just imagine how that
will increase if we continue to see further consolidation.
Again, thank you, Mr. Chairman, for holding this important
hearing.
Senator Dorgan. Senator Snowe?
And then we will go the witnesses. I believe we have a
vote, or votes, starting about 11:45. So----
Senator Snowe?
STATEMENT OF HON. OLYMPIA J. SNOWE,
U.S. SENATOR FROM MAINE
Senator Snowe. Thank you. Yes, thank you, Mr. Chairman, and
I'll move very quickly.
I appreciate the fact that we're having this hearing to
highlight and underscore the whole likelihood of the FCC moving
forward to, again--once again, to address the question of media
consolidation and to pursue an ill-advised loosening of those
restrictions regarding the consolidation of corporate ownership
of media. And I think that that is truly disturbing. We've
already been there. And it seems like, ``Here we go again,'' in
this pursuit of easing up on these restrictions and regulations
where the U.S. Congress, the U.S. Senate--even the Third
Circuit Court indicated its objection in the way in which the
FCC pursued this in the past, because it had none of the data
necessary or essential to underscoring and to buttressing their
recommendations to ease up on these media rules and
regulations.
And I want to welcome Frank Blethen here today, because he
has been one who has effected national leadership in
galvanizing the public's attention on this question so
passionately and eloquently. He owns newspapers in the State of
Maine. As Maria indicated, it's part of an independent, family-
owned operation for four generations now, which is critically
important, but really, I think, underscoring the perils and
ramifications of further consolidation in the media
marketplace.
So, after nearly 5 years, examining this question before
the Committee--and the fact is, we rejected what the FCC did
previously, when they sought to weaken those ownership
restrictions. We passed a joint resolution in the Senate. We
passed a statutory provision limiting the national ownership
cap to 39 percent. And, as I mentioned, the Third Circuit Court
of Appeals rejected the attempts at revising these rules as
capricious and arbitrary, after finding that the FCC had no
factual base in which to establish that.
So, it clearly is disturbing that the FCC would move pell-
mell to move in this direction once again, without--
insufficient information. And I would call everybody's
attention to the comments that were submitted to the FCC in
response to the speculation about their attempts to revise
these rules, but also on the basis of the ten studies, that
there is a real question about the integrity of those studies,
that they have not been peer-reviewed, a question of the
methodology, a question of their research. And the consumer
commenters submitted very extensive analysis of the FCC
reports, and it's clear that localism was not even regarded or
considered as part of the overall process in what is going to
happen to diminish localism and diversity in the media
marketplace.
And so, I would urge that the FCC consider the comments
that are made here today, but, most importantly, we do
everything that we can to reject this attempt on one--on the
question that we have revisited and rejected in the past.
Senator Dorgan. Senator Snowe, thank you very much.
Senator Inouye?
STATEMENT OF HON. DANIEL K. INOUYE,
U.S. SENATOR FROM HAWAII
The Chairman. Thank you very much, Mr. Chairman.
Yesterday, I had a meeting with Chairman Martin to discuss
matters of diversity, localism, and competition, and stressed
to him my strong belief that rushing to judgment before the end
of this year would be a serious mistake. And, therefore, we
have scheduled this hearing this morning to listen to the
important independent voices of the industry.
We are scheduling a hearing with the Chairman and the
Commission in December. I think it will be about the 13th of
December, but it has not been finalized yet. It should give the
Commission sufficient time to listen to our voices, our
concerns, and I hope they'll make the right decision.
Thank you very much, sir.
[The prepared statement of Senator Inouye follows:]
Prepared Statement of Hon. Daniel K. Inouye, U.S. Senator from Hawaii
Let me begin today by stating that I am very troubled by efforts at
the FCC to allow greater consolidation of our media. This is an area
that requires tremendous caution, because the media is a tremendous
force. It can inform, educate, and entertain, as well as nourish our
democratic dialogue. Yet is also has less savory powers. In recent
years, we have seen an increase in coarse and violent programming, but
a decrease in local news and hard-hitting journalism. As our media
grows more concentrated, we see less and less of the diversity of our
Nation. When programming is the same from coast to coast, we risk
having our airwaves no longer reflect the rich mosaic of our country
and our citizens.
Four years ago, the FCC substantially relaxed the rules that govern
media ownership in this country. Millions of Americans contacted the
FCC to complain. The U.S. Senate voted to support a ``resolution of
disapproval'' in response to the FCC decision. Next, the courts got
involved, and the Third Circuit shipped the agency's handiwork right
back to the FCC.
So we are back at square one. The FCC is poised to review its media
ownership rules yet again. There are whispers, too, that the FCC may
want to roll the rules back before the end of the year. So let me
caution the agency now: we are watching. Rather than rushing to
judgment on broad new rules, the FCC should focus on completing pending
proceedings on localism and public interest obligations that have long
languished for lack of attention. If rule changes are required, the
American people deserve to be informed and provided a reasonable period
of time for comment and discussion. I have discussed these matters with
Chairman Martin, and have stressed my belief that rushing forward
before the end of the year would be a serious mistake.
Against this backdrop, we hold today's hearing. It provides us with
an opportunity to hear from our witnesses on the state of media
ownership, localism, and diversity. I look forward to their testimony
on this important topic.
Senator Dorgan. Mr. Chairman, thank you very much.
We have a very distinguished panel today, and we have five
witnesses. We will begin with Mr. Alex Nogales, the President
and CEO of the National Hispanic Media Coalition.
The prepared testimony from all of the witnesses will be
included, as prepared, in the entire record of the Committee,
and we would ask that the witnesses summarize.
Mr. Nogales, you may proceed.
STATEMENT OF ALEX NOGALES, PRESIDENT AND CEO, NATIONAL HISPANIC
MEDIA COALITION
Mr. Nogales. Good morning, Mr. Chairman and members of the
Committee. Thank you very much for the opportunity to testify.
My name is Alex Nogales, and I am the President of the
National Hispanic Media Coalition. The National Hispanic Media
Coalition is a 21-year-old nonprofit civil rights and advocacy
organization created to improve the image of American Latinos
as portrayed by the media, and to advocate for media and
telecommunications policies that benefit the Latino community,
as well as other communities of color.
I'm here today to deliver a message of profound importance
to our community. It is simply this: the state of minority
ownership in the American broadcast industry is in crisis. Our
country is diversifying, but our media are not. More than a
third of Americans are people of color. Yet they own less than
3 percent of commercial television stations and less than 3
percent of radio stations, and these numbers are in decline.
This is a dangerous and disgraceful situation. Ownership
determines the content in our media system, and if the media
structure rests on inequality, it will breed inequality in
representation, culture, and politics. We cannot build a just
society if the mass media remains in the hands of the few at
the expense of the many. That is why the Congress instructed
the Federal Communications Commission to promote minority
ownership in 1996 in the Telecommunications Act.
But the FCC has neglected its responsibility. First, the
FCC has never produced an accurate count of how many broadcast
licenses are owned by people of color. It is hard to believe
this could be the case, but it is.
Second, the FCC has long supported policies that permit
further media consolidation, despite clear evidence that it
shuts out minority broadcasters.
Third, the FCC has ignored instruction from Congress and
the courts to advance the cause of minority ownership.
In short, minority ownership is in crisis, because the FCC
does not seem to care about minority ownership and has done
nothing meaningful to address the problem.
As we speak, the FCC is preparing to allow more
consolidation at the expense, once again, of minority owners.
Let me assure you that, while the FCC neglected this issue,
communities of color have not, and will not remain silent, not
ever again. More than 20 national civil rights organizations,
including not only the National Hispanic Media Coalition, but
also the National Council of La Raza, LULAC, Rainbow PUSH, and
the Urban League, as well as numerous congressional leaders,
have all called on Chairman Martin to support the creation of
an independent task force that will address the issue of
minority ownership before the Commission considers issuing new
rules on media ownership.
Chairman Martin has rejected these appeals as he races
toward a vote on new rules by year's end. His indifference is
so brazen, because he knows such a study will demonstrate that
media consolidations reduces minority ownership. And the
Commission cannot support a policy of media consolidation and
minority ownership at the same time, because they are in direct
opposition. The severity of the problem cannot be brushed
aside. Latinos comprise 15 percent of the U.S. population, but
own just 15 of the more than 1,300 full-power commercial
television stations. That is 1 percent. Radio is not much
better. We own just over 300 of more than 10,000 radio
stations, just under 3 percent, again.
Here's another disturbing example. A recent survey of media
usage conducted by the FCC asked about media usage for minority
groups, except for Latinos. This kind of oversight is symbolic
of the agency's attitude towards the Latino community.
The FCC must not move forward with new ownership rules
until it creates an independent minority ownership task force
that is empowered to perform an accurate census on minority and
female owners, as well as an analysis of the impact of these
policy decisions on minority ownership.
Concentrated media ownership leads to media content that is
harmful to communities of color. We have seen a rapid rise in
hate speech on talk radio programs attacking the Latino
community as a result of the debate over undocumented workers.
You've all heard it, you know what I'm talking about. The
megaphone offered to the odious brand of hate speech comes with
the compliments of radio conglomerates that own hundreds of
stations across the country. They are not accountable to their
local communities and care little for the political and
cultural impact of their programming.
Just look how fast these large companies put Don Imus back
on the air, just months after making racist remarks about
African-American women. Insults like the Don Imus racial slurs
are also happening every day across and against the Latino
community. But there is nothing but silence from the Federal
Communications Commission. There is even one fellow, John
Stokes, out of Montana, that is advocating for those that do
not speak English to have an arm cut off, and that is very
directly going against the Latino community.
Hate speech is a symptom of the larger disease of
inequality in the ownership of broadcast stations. Undeniably,
more diversity of ownership will result in more diversity of
content. Let us not forget, it is the policy of this country to
bring the diversity of broadcast owners into alignment with the
diversity of the population. For too long, the FCC has made the
situation worse instead of better. It is time for Congress, for
all of you, to reverse this disastrous course and begin to take
the country down the long road towards equality.
I thank you very much for your attention, and I look
forward to your questions.
[The prepared statement of Mr. Nogales follows:]
Prepared Statement of Alex Nogales, President and CEO,
National Hispanic Media Coalition
Good morning Mr. Chairman and members of the Committee. Thank you
for the opportunity to testify.
My name is Alex Nogales, I am the president of the National
Hispanic Media Coalition. The National Hispanic Media Coalition (NHMC)
is a 21-year-old non-profit civil rights and advocacy organization
created to improve the image of American Latinos as portrayed by the
media and to advocate for media and telecommunications policies that
benefit the Latino community.
I am here today to deliver a message of profound importance to my
community. It is simply this: the state of minority ownership in the
American broadcast industry is in crisis.
Our country is diversifying, but our media is not. More than a
third of Americans are people of color. Yet they own less than 3
percent of television stations and less than 8 percent of radio
stations--and these numbers are going down, not up. This is not only a
disgraceful situation, it is a dangerous one. Because ownership
determines the content in our media system. And if the structure of
media ownership rests on inequality, it will breed inequality in
representation, culture and politics.
We cannot hope to build a strong and just society if the tools of
mass media and representation remain in the hands of the few at the
expense of the many. This is why the Congress instructed the Federal
Communications Commission to promote minority ownership in the
Telecommunications Act of 1996. But the FCC has ignored that
responsibility. Its record of neglect is deeply troubling. Let me
review the agency's track record:
First, the FCC has never produced an accurate count of how many
broadcast licenses are owned by people of color. It is hard to believe
this could be true, but it is true.
Second, the FCC has long supported policies that permit further
media consolidation despite the clear evidence in the marketplace that
it shuts out minority broadcasters.
Third, the FCC has ignored both the Congress and the Courts, both
of which have instructed the agency to advance the cause of minority
owners.
In short, minority ownership is in crisis because the Commission
does not seem to care about minority ownership and has done virtually
nothing meaningful to address the problem.
And now, it is happening once again. As we speak, the FCC is
preparing to change media ownership rules to allow more consolidation.
This policy will come at the expense, once again, of minority owners.
But let me assure you, while the FCC may have neglected this issue,
communities of color have not been silent.
In response to the FCC's current drive toward media consolidation,
more than 20 national civil rights organizations, including NHMC, the
National Council of La Raza, the League of United Latin American
Citizens, Rainbow PUSH, and the Urban League, as well as numerous
congressional leaders have all called on Chairman Martin to support the
creation of an independent task force that will address the issue of
minority ownership before the Commission considers issuing new rules on
media ownership.
But unfortunately, Chairman Martin has rejected these appeals.
Instead he is racing full speed ahead with plans to make rules by the
end of the year. He will do this despite the fact that his agency has
never addressed the potential impact on minority owners. His
indifference is so brazen that he has not even counted the minority
owners!
He has refused to count minority owners and measure the impact of
consolidation because he knows that any such study will demonstrate
what we already know: media consolidation reduces minority ownership.
You cannot have a policy that promotes media consolidation and minority
ownership at the same time. They are in direct contradiction. Decision
makers must all take a hard look in the mirror and make a choice. It is
either one or the other. Ignoring this fundamental question is
unacceptable.
The severity of the problem cannot be brushed aside. Latinos
comprise 15 percent of the U.S. population. Yet Latinos own just 15 of
the more than 1,300 full-power commercial television stations in
America. That is 1 percent. Radio is not much better. We own just over
300 radio stations out of more than 10,000, just under 3 percent. This
level of inequality is absolutely unsustainable.
The FCC cannot solve this problem with a minor course correction.
We need a full rethinking of the Commission's priorities. Let me give
you another disturbing example. In a recent survey of media usage
conducted for the FCC by Nielsen, the agency simply forgot to ask about
Latinos. They asked about every other minority group, but left out
Latinos. This kind of oversight is symbolic of the attitude of this
agency toward the Latino community.
This is why the FCC must not move forward with issuing new media
ownership rules until it creates an independent minority ownership task
force that is empowered to perform an accurate census on minority and
female owners and then analyze the impact of policy decisions on
minority ownership.
Concentrated media ownership leads to media content that is harmful
to communities in color in so many ways. Let me give you just one
example before my time is up that illustrates the point. In recent
years, we have seen the rise in hate speech on talk radio programs
attacking the Latino community as a result of the debate over
undocumented workers. The megaphone offered to this odious brand of
hate speech comes with the compliments of large, radio conglomerates
that own hundreds of stations across the country. They are not
accountable to their local communities, and they care little for the
political and cultural impact of their programming behind the bottom
line.
Just look how fast these large radio companies put Don Imus back on
the air just months after receiving national shame for making racist
remarks against African American women. Broadcast insults like the Don
Imus racial slurs are happening everyday against the Latino community
and there is nothing but silence from the FCC.
Hate speech is a symptom of the larger disease of inequality in the
ownership of broadcast stations. Undeniably, more diversity of
ownership would result in more diversity of content. Let us not forget
it is the policy of this country to bring the diversity of broadcast
owners into alignment with the diversity of the population. For too
long the FCC has made the situation worse instead of better.
It is time for Congress to reverse this disastrous course and begin
to take the country down the long road toward equality.
I thank you for your attention, and I look forward to your
questions.
Senator Dorgan. Mr. Nogales, thank you very much for being
here and for your testimony.
Next, we'll hear from Mr. Frank A. Blethen, who is
Publisher and CEO of The Seattle Times.
Mr. Blethen, you may proceed.
STATEMENT OF FRANK A. BLETHEN, PUBLISHER AND CEO, THE SEATTLE
TIMES
Mr. Blethen. Thank you, Senator Dorgan. ``There is freedom
in a variety of voices. There is, I believe, a fundamental
reason why the American press is strong enough to remain free.
That reason is that the American newspaper, large and small,
and without exception, belongs to a town, a city, at the most,
a region. The secret of a free press is that it should consist
of many newspapers, decentralized in their ownership and
management, and dependent for their support upon the
communities where they are written, where they are edited, and
where they are read. There is safety in numbers and in
diversity and in being spread out and in having deep roots in
many places. Only in variety is there freedom.''
These are the words of noted journalist Walter Lippman,
spoken half a century ago.
I'm Frank Blethen, the Publisher of The Seattle Times. My
family has lived in Seattle for 111 years. My family epitomizes
the local connection Lippman so accurately cites as the
foundation of our freedoms. We are accountable only to our
local community and to our heritage with its paramount
stewardship duty of independent journalism and community
service.
Tragically, the essential localism and ownership diversity
Lippman praises has been abandoned by Congress and by the FCC.
Throughout America, in print and in broadcast, concentrated
absentee ownership abounds. With it has come a disinvestment in
journalism, causing serious erosion in America's public policy
literacy and civic engagement.
The public knows something is wrong. When given the
opportunity, they vehemently oppose media control. They plead
for more localism and multiple voices, which are the very
oxygen of their community and a healthy democracy.
As we witness the inevitable failure of the publicly traded
and absentee ownership model which has come to dominate
newspapers and broadcasts, America is at a crossroads. This
committee has the opportunity to lead Congress down an
enlightened path. You have it in your power to be the public
servants Jefferson and Hamilton envisioned when they championed
a free press as the essential fourth leg on the democratic
stool.
You are told conglomerate owners need more consolidation
because the business model is broken. Nothing is further from
the truth. After decades of milking newspapers and TV stations
for some of the highest pre-tax profit margins imaginable,
often as high as 30 percent for newspapers and 50 percent for
broadcast, it has become impossible for these financially
driven owners to sustain these small margins.
We are simply going back to the future, when I started in
the industry, 40 years ago, when newspapers were nice, locally
owned, single-digit margin businesses, generating good cash-
flow to operate the business and invest in journalism and
community. And there is no reason to believe that local
newspapers and local broadcasters can't continue to sustain
successful businesses and fulfill their public mandate, going
forward. Even today, amid the false claims you hear that the
economic model is broken, the publicly traded newspaper sector
is reporting 16 to 18 percent profit margins.
You have the opportunity to save our free and local press,
to rejuvenate America's civic engagement, and to lay the
foundation to preserve our democracy longer than any the world
has seen. To do so, you must keep all current FCC ownership
restrictions and public service mandates in place, including
the all-important local cross-ownership ban. You must insist
that the egregiously unenforced mandates of minority ownership,
female ownership, and public-service air time be vigorously
enforced. You must craft new FCC mandates to ensure Internet
freedom. You need to institute a ban on cross-ownership of
print and national broadcast outlets, as a companion to the
local cross-ownership ban. You must boldly put forth limits on
newspaper ownership, and create incentives and rewards for
owners who invest in journalism.
I implore you to look to the future and create public
policy which allows our Nation's free and local press to again
thrive, and thus, ensure our democracy. This is a historical
moment. The American citizen needs your leadership.
Thank you.
[The prepared statement of Mr. Blethen follows:]
Prepared Statement of Frank A. Blethen, Publisher and CEO,
The Seattle Times
Chairman Inouye, distinguished Senators, thank you for the
opportunity to share my perspectives with you today.
There is freedom in a variety of voices.
There is, I believe, a fundamental reason why the American
press is strong enough to remain free. That reason is, that,
the American newspaper, large and small, and without exception,
belongs to a town, a city, at the most to a region.
The secret of a free press is that it should consist of many
newspapers, decentralized in their ownership and management,
and dependent for their support--upon the communities where
they are written, where they are edited and where they are
read. There is safety in numbers, and in diversity, and in
being spread out, and in having deep roots in many places.
Only in variety is there freedom.
These are the words of noted journalist Walter Lippman, spoken
half a century ago.
I'm Frank Blethen, publisher of The Seattle Times. My family has
lived in Seattle for 111 years. We epitomize the local connection
Lippman so accurately cites as the foundation of America's freedoms. We
are accountable only to our local community and, to our heritage with
its paramount stewardship duty of independent journalism and community
service.
Tragically, the essential localism and ownership diversity Lippman
praises has been abandoned by Congress and the FCC. Throughout America,
in-print and broadcast, concentrated absentee ownership abounds. With
it has come a disinvestment in journalism, causing serious erosion in
America's public policy literacy and civic engagement.
The public knows something is wrong. When given the opportunity
they vehemently oppose more media control. They plead for the localism
and multiple voices which are the very oxygen of community and of a
healthy democracy. As we witness the inevitable failure of the publicly
traded and absentee ownership model which as come to dominate our
newspapers and broadcast, America is at a crossroads.
This Committee has the opportunity to lead Congress down an
enlightened path. You have it in your power to be the public servants
Jefferson and Hamilton envisioned when they championed a free and
independent press as the essential fourth leg on the democratic stool.
You are told conglomerate owners need more consolidation because
the business model is broken. Nothing is further from the truth. After
decades of milking newspapers and TV stations for some of the highest
pre-tax profit margins imaginable, often as high as 30 percent for
newspapers and 50 percent for broadcast, it has become impossible to
sustain these false margins.
We are simply going ``back to the future'' when I started in this
industry 40 years ago. When newspapers were nice, locally owned, single
digit margin businesses, generating good cash-flow to operate the
business and invest in journalism and community. There is no reason to
believe that local newspapers and broadcasts can't both sustain
successful business and fulfill their public service mandate going
forward. Even today, amid false claims, the economic model is broken,
the publicly traded newspaper sector is reporting 16-18 percent profit
margins!
You have the opportunity to save our free and local press, to
rejuvenate America's civic engagement and, to lay the foundation to
preserve our democracy longer than any the world has seen.
To do so, you must keep all current FCC ownership
restrictions and public service mandates in place, including
the all-important local cross ownership ban.
You must insist that the egregiously unenforced mandates of
minority ownership, female ownership and public service air
time be vigorously enforced.
You must craft new FCC mandates to ensure Internet freedom.
You need to institute a ban on cross ownership of national
print and national broadcast outlets as a companion to the
local cross ownership ban.
You must boldly put forth limits on newspaper ownership and
create incentives and rewards for owners who invest in
journalism.
I implore you to look to the future and create public policy which
allows our Nation's free and local press to again thrive and thus
ensure our democracy.
This is a historic moment. The American citizen needs your
leadership. Thank you.
The Democracy Papers--September 9, 2007
Fasten Your Seat Belts: Full-Speed Media Ahead
By James F. Vesely, Seattle Times Editorial Page Editor
The American press is often reluctant to report on itself, but the
overwhelming trends in media consolidation and in fragile instruments
of democracy such as low-power radio lead these opinion pages to a
series of editorials and essays titled ``The Democracy Papers.''
The media are much talked about but rarely read about in the
country's newspapers. Yet, the press--a better word than ``media''--is
the coaxial cable that runs through the heart of the country and keeps
us in touch with each other.
That voice and its counterpart, the public ear, have evolved into a
cacophony of sounds and images, exactly what the Federal Communications
Commission warned of when it first established government as the umpire
of the Nation's airwaves. The umpires are long gone from the world of
blogging, podcasting, text messaging, 24/7 news cycles and community
channels. The thud on the front porch that is the newspaper at 5:30
a.m. is a delivery system of the 19th century, now sophisticated enough
to give near-precise directions for every paper sent flying through the
dawn.
But delivery is not message and message is not the same as content.
The press and democracy are one interlocking tree and root system, but
its branches are spreading and the cost of keeping single voices
independent and in the sunlight is becoming high.
The series begins today with an essay from FCC Commissioner Michael
J. Copps, who begins the narrative with an important government
meeting, closed to the media, that produced a 5,000-word document that
is known as the U.S. Constitution.
Since that storybook time, the role of the media in America has
been embellished by technology, but its function should--and must--stay
the same.
In the coming weeks, we will test that theory, that a free press is
waning in America and with it the strength of our democracy. Writers on
media consolidation, the music industry, the role of the press as
unofficial signatory to democratic government, and the future of
broadcast and print will be examined in editorials and guest essays.
Monday's opinion pages will continue the examination of the role of
the FCC with an editorial about the commission's failures, and an essay
by Edwin C. Baker, professor of law at the University of Pennsylvania
and author of ``Media Concentration: Why Ownership Matters.''
The Seattle Times' editorial pages will have reports on how
democracy fares with or without a free press in Uganda, China and
Russia. We will examine how journalism is taught at the college level
and look back at the scoops and blunders of Northwest journalism in the
years of Seattle's booms and busts.
Finally, the series will examine open government in our state. A
new oversight committee is supposed to do just that--yet the editors of
broadcast and print news all over Washington understand government's
innate and almost unconscious resolve to protect itself from critical
news stories.
The press's mutual dependence on government, big-league sports,
business interests and organized labor for news and information has
been disrupted--often for the good--by the individual journalist, a
blogger with a keypad. We will profile some of them and try to
understand their frustrations and anger with America's press.
It's a big swoop and it will take us several months to try to tell
this story and shape some opinions about it. But it begins now.
______
The Seattle Times--September 9, 2007
The Newspaper's View, Democracy, The Press at a Critical Juncture
American democracy is suffering. The natural strain on our
political system after more than two centuries is accelerating with the
purposeful weakening of the press.
This erosion has been fueled in recent decades by politically
calculated legislation, and regulatory agencies not regulating.
Political aggression coupled with bureaucratic acceptance has led to
the massive consolidation of American and global media.
The Federal Communications Commission can realign democracy with
the Founders' vision by acting in the public's interest on a number of
issues, such as network neutrality, cross-ownership and broadband. If
the FCC missteps, the United States is in danger of losing its
independent news organizations.
The press--newspapers, radio, television and magazines--plays a
role in democracy every bit as important as Congress, the Executive
Branch and the judiciary. That watchdog role is in danger now that
newspapers, which are the driving force behind most original reporting,
are being strained by consolidation.
Why should Americans care who owns the press?
Because a democracy ceases to be a political system that promotes
liberty when the press is muzzled.
Ownership still matters. The corporatization of news has laid bare
how woefully unwilling strictly market-driven conglomerates are to
fielding aggressive news organizations with a public-service mission.
Citizens should look at the press as part of democracy's structure.
When viewed through this lens, it becomes apparent that a national
discussion is needed about the press, its function, who owns it, and
what can be done to ensure it stays vital and independent.
The courts and the FCC have historically recognized the importance
of the press and its relation to democracy. Rulings such as the
Associated Press v. United States in 1945 and New York Times Co. v.
Sullivan in 1964 demonstrated the court's position. These rulings are
now part of a sentimental past.
In 2003, the FCC voted to loosen the rules governing cross-
ownership so that one company could own a newspaper, three television
stations, eight radio stations and an Internet service provider in the
same market. The commission bucked millions of public comments against
such an undemocratic arrangement.
Thankfully, the courts put the FCC's plan on hold. Unfortunately,
the U.S. 3rd Circuit Court of Appeals did not completely block the new
rules. The court sent the rules back to the FCC to be reworked. Lifting
the ban is still a possibility. Even though the FCC has a new chairman
since the 2003 debacle, the majority Republican commission has
indicated it likes the idea of big media as a complement to big
government.
The government's penchant for bigness is obvious. Radio has been
consolidated to minuscule numbers of owners who favor generic play
lists. Adding to the corrosion of American creativity is the loss of
radio news--too expensive for the big companies. The gutting of local
radio has also blocked minorities and women from the most accessible
entry point to media ownership.
Television news has devolved into a cliche. Weather, crime and car
accidents fill airspace that was once the domain of substantive reports
from city hall and the capitol. The trends have not been much kinder to
newspapers. The majority of readers need a score card to keep track of
which corporation owns their newspaper.
The press is going through a radical transformation. The old way of
doing business is dead. Press opponents know this, and are spending a
lot of money in Washington to transform the news into a commodity every
bit as purchasable, and salable, as toilet paper.
The Federal Government has largely failed to protect an independent
press. Instead, policies have been tailored for big corporations that
are blindly beholden to the market, and increased quarterly profits.
Democracy does not simply happen. It requires nurturing. It needs
the public to be aware of assaults against it, small and large. The
courts must rebuff debilitating press laws, and politicians should
champion media reform.
It is not too late. American democracy and the press are at a
critical juncture. What started as a boisterous grand experiment
powered by the pen, has become background noise to American life.
Democracy's frequency has to be returned for all to hear.
The press--its state, and how it can be saved--is the right place
to begin the discussion.
______
The Seattle Times--September 9, 2007
Democracy and Media, Do We Currently Have a System That Would Make Our
Founding Fathers Proud?
By Michael J. Copps, Special to The Seattle Times
An important government meeting was once called but closed to the
media. The assembled leaders produced a 5,000-word document, finalized
early enough to be manually typeset by the close of the proceedings.
Within weeks, it was reproduced by newspapers in every state. It
came to preoccupy the Nation's signed and unsigned editorialists, as
well as its political reporters. It prompted conventions across the
nation--which we know far more about because they were all open to the
media.
The document was ultimately endorsed with some additions, most
notably language addressing the role of journalism in a free society.
The document is of course the U.S. Constitution, the string of
anonymous op-eds is now known as the Federalist Papers, and the little-
debated addition is the First Amendment.
James Madison's original draft in the House of Representatives
spoke of the press as one of the ``great bulwarks of liberty,'' echoing
language first put forth by the Virginia ratifying convention. But
Congress adopted the more economical formulation we know today.
It is enormously revealing that our Nation's popular press
literally predates our foundational political document, and played a
key role in its formation. After all, in Europe, where the power of
government remained solidly in the grasp of elites at the end of the
18th century, there was no obvious need or demand for a popular press
covering--let alone criticizing--the acts of government. But in a
democracy--where every citizen is allowed and expected to vote--a
professional, independent, objective media is fundamental.
Today, the U.S. is vastly more powerful and richer than in the
heady days of Madison and the Constitutional Convention. But do we
currently have a media system that would make our Founding Fathers
proud?
I fear not. We have a system that has been buffeted by an endless
cycle of consolidation, budget-cutting, and bureau-closing. We have
witnessed the number of statehouse and city hall reporters declining
decade after decade, despite an explosion in state and local lobbying.
As the number of channels has multiplied, there is far less total local
programming and reporting being produced. These days, if it bleeds, it
leads.
Interested in learning about local politics from the evening news?
About 8 percent of such broadcasts contain any local political coverage
at all, including races for the House of Representatives, and that was
during the 30 days before the last Presidential election.
Interested in how TV reinforces stereotypes? Consider that the
local news is four times more likely to show a mug shot during a crime
story if the suspect is black rather than white.
What has caused this appalling degeneration of our media? One
factor, I am ashamed to say, is the abdication of responsibility by
regulators at the Federal Communications Commission. We allow the
Nation's broadcasters to use spectrum worth billions of dollars,
supposedly for programming that serves the public interest.
Once upon a time, the FCC actually enforced this bargain by
requiring a thorough review of a licensee's performance every 3 years
before renewing the license. But during the market absolutism of the
Reagan years, we pared that down to ``postcard renewal,'' a rubber
stamp every 8 years with no substantive review.
It is time to do better. The FCC needs to reinvigorate the license-
renewal process. We need to look at a station's record every three or
four years. And let's actually look at this record. No more rubber
stamps. Did the station show original programs on local civic affairs?
Did it broadcast political conventions? In an era where too many owners
live thousands of miles away from the communities they allegedly serve,
have these owners met with local leaders and the public to receive
feedback?
Another factor is the FCC's woeful record of stepping aside to
allow wave after wave of consolidation in the broadcast and print
business. Though there are rules on the books designed to prevent too
much cross-ownership of TV, radio and print properties in a single
market, we have not enforced them with the rigor they deserve.
Far more troubling was what the FCC tried in 2003--over my strong
objection--to relax the cross-ownership rules. The agency actually
voted 3-2 to allow a single company to own up to three TV stations,
eight radio stations, the daily newspaper (a monopoly in most towns),
the cable system and the Internet service provider.
Thank heavens Congress and the courts stepped in to overturn that
terrifyingly bad decision. But now the agency is considering changes to
these very same rules.
I say this is hardly the time to rush headlong into more of what we
know has not worked given the wreckage caused by our decades-long
flirtation with the notion that Wall Street always knows best when it
comes to journalism.
As the FCC and America move forward into the brave new world of
media in the 21st century, I hope we can agree the public interest is
not just another way of saying ``corporate profit maximization.''
President Franklin D. Roosevelt, my personal hero, once said in a
letter to newspaper publisher Joseph Pulitzer, ``I have always been
firmly persuaded that our newspapers cannot be edited in the interests
of the general public from the counting room.''
The same is true of broadcast journalism. Consider the fact that
the existence of local news in Spanish in a market can boost election
turnout among Spanish speakers by more than 10 percent. No dollars-and-
cents calculation is going to take account of that extraordinary boost
to our Nation's democracy.
If technology and changes in the economics of the news business
have made the old ways impossible, we need to find new ways to develop
a media system that can serve democracy. That is not a luxury, it is a
necessity.
I take great comfort from the conclusion of another critic of the
current media system, Walter Cronkite, who said, ``America is a
powerful and prosperous nation. We certainly should insist upon, and
can afford to sustain, a media system of which we can be proud.''
Let's work together to show that it can be done. Our democracy
demands it.
______
The Seattle Times--September 10, 2007
The Newspaper's View, Failures of the American Airwaves
The Federal Communications Commission has failed the people and the
democratic system it is supposed to protect.
The many failures reached ridiculous heights in 2003 when the
majority Republican commission split along party lines to gut the
cross-ownership ban. The change would have allowed a single company to
own a newspaper, three television stations, eight radio stations and an
Internet service provider in the same market.
The sinister move did not go unnoticed. The FCC was flooded with 3
million comments. Clearly, the American public is attuned to the threat
media consolidation poses to democracy.
America's press, and other sectors of the media, will continue to
be marginalized unless politicians act on the currents of energy
created by the growing media-reform movement. Politicians, both
Republicans and Democrats, should push back on the FCC.
The FCC can act on a number of issues that will quickly begin the
revival of an independent press and a healthy democracy.
Cross-ownership. The bloating of the world's media conglomerates
begs lawmakers to reexamine this rule. Not only does it need to be
better enforced, the rule needs to be expanded on a national level. No
company should be allowed the reach and power of News Corporation. The
FCC has to be alarmed that the conglomerate now owns the New York-based
Wall Street Journal, Fox News, two television stations and a daily
newspaper in the city. News Corporation is also launching a national
financial channel.
Licensing. The FCC should use a licensing program requiring
television stations to go through a rigorous renewal every 3 years. The
current system has almost no impact, and renewal is done every 8 years.
Stations simply send in a postcard.
Network neutrality. This awkwardly named proposal would keep
network providers--such as AT&T or Comcast--which supply the pipes
through which the Internet moves, from implementing different pay
scales for different levels of service. This law would ensure the
Internet remains a place for innovation and is not controlled by the
companies that own broadband.
These are just a few actions the FCC and lawmakers could take to
perpetuate the press's indispensable role in a democracy. It is time
the FCC acted in the best interests of the people it was created to
serve, instead of large corporations.
______
The Seattle Times--September 10, 2007
Dispersed Media Ownership, Serves Democratic Values
By C. Edwin Baker Special to the Seattle Times
The Federal Communications Commission is considering whether to
reduce restrictions on broadcast-station ownership, an action that
would permit greater media and press concentration.
This is a bad idea. Bad for audiences, for citizens, and for
democracy. Dispersed media ownership, ideally local ownership, serves
democratic values, while conglomerate ownership and media mergers,
which would be the result of reduced ownership restrictions, do the
opposite.
Equality--one person one vote--provides the proper standard for the
distribution of power and voice in a democracy. Maximum dispersal of
media ownership can enable more people to identify a media entity as in
some sense speaking for and to them.
Dispersed ownership also reduces the danger of inordinate,
potentially demagogic power in the public sphere. As the FCC once
recognized, many owners creates more independent decisionmakers who can
devote journalistic resources to investigative reports. Finally,
dispersal reduces--without eliminating--potential conflicts of
interests between journalism and an owner's economic interests.
In contrast, media mergers put papers and broadcasters into the
hands of executives whose career advancement depends on maximizing
profits. Mergers require owners to squeeze out more profits to pay off
debt created by the high bid made to secure the purchase. As too many
recent examples show, the most consistent method to reduce expenses is
to fire journalists.
Smaller owners, free from the financial burden of paying for
mergers, have more room to maintain a commitment to quality. They can
be interested in how their paper contributes to their community, not
merely to their family's wealth. While certainly not true in every
case, research shows that, holding other factors constant, smaller
owners tend to hire more journalists and commit more resources to
journalism than do the conglomerate owners.
For the media to have a single-minded emphasis on the bottom line
is dangerous for democracy. Unlike many companies whose main business
is providing individual consumers with goods they value, the press
provides value to the public at large. Non-readers benefit when the
press identifies government corruption or corporate malfeasance. News
organizations that practice aggressive investigative reporting can
benefit the public without even producing a story to sell readers when
their reputation for reporting deters wrongdoing.
Of course, the newspaper does not profit from providing these
benefits to those who do not purchase the paper. Papers concerned
primarily with profits have inadequate incentives to provide this kind
of beneficial journalism. Only a commitment to traditional journalistic
values leads to the commitment of the journalistic resources necessary
to provide this public good.
It is precisely because the press can provide the public with these
kinds of benefits that it is the only private business to receive
special constitutional protection. This explains why the FCC has long
restricted concentration of ownership of broadcast stations and the
cross-ownership of a local broadcast station and a newspaper within a
community.
Large media companies often claim that any restraint on their
freedom to merge violates their rights under the First Amendment. But
in writing for the Supreme Court, Justice Hugo Black, famous for his
absolute commitment to the First Amendment, rejected this claim,
stating: ``Surely a command that the government itself shall not impede
the free flow of ideas does not afford non-governmental combinations a
refuge if they impose restraints upon that constitutionally guaranteed
freedom . . . Freedom of the press . . . does not sanction repression
of that freedom by private interests.''
The Supreme Court strikes down any law censoring what the media can
say. At the same time the court consistently follows Black's logic by
upholding any law that can be reasonably defended as furthering a more
democratic structure of the press.
Rather than reduce restrictions on media ownership, the FCC should
expand ownership restrictions and create regulatory preferences for
more diversified and more local ownership.
The FCC or Congress could extend the ban on cross-ownership to
prohibit ownership both of a national newspaper or a large newspaper
chain and of a national broadcast or cable network. This rule would, as
it should and constitutionally could, require undoing the recent
purchase by Rupert Murdoch's News Corporation of The Wall Street
Journal.
Widely dispersed ownership of independent media serves both
democracy and the First Amendment. It embodies a commitment that is
good for everyone in a democratic society.
C. Edwin Baker, author of ``Media Concentration: Why Ownership
Matters,'' is a professor of law at the University of Pennsylvania.
______
The Seattle Times--September 16, 2007
The Newspaper's View . . . Build Broadband
The Internet is an important conduit to commerce and innovation, a
medium that has wildly exciting communication potential. Yet, the
United States' paltry broadband network lags behind most of the
industrialized world. Our weak Internet infrastructure not only puts
the Nation at a competitive economic disadvantage, it threatens
democracy.
Japan and South Korea have cheaper Internet service that is many
times faster than that in the U.S. To get an idea of how far behind
Japan we are, think of our network as a Soviet-era grocery store and
Japan's as Whole Foods.
At least a dozen countries have zipped by America because of smart
government regulations that encouraged the build-out of networks and
promoted competition. It is time Congress and the Federal
Communications Commission did the same.
A national discussion about what we want, and need, for the
Internet of the future is part of the solution.
Should it be treated like the airwaves, which belong to the public?
Can network providers like AT&T be forced to allow broadband startups
onto their lines? Could a system modeled after public utility districts
help broadband reach areas that are not attractive to network
providers?
So far, the discussion has been defined by lobbyists for the
telecom and cable companies, which have spent many millions of dollars
opposing network neutrality and any legislation that would force
competition. How much will their networks be worth if all the brightest
minds migrate to where their talents can contribute to society and be
monetized? Americans should be worried about the current level of
service. This is a serious problem that goes beyond the annoyance of
slow-loading Web pages. Many rural and poor areas still use painfully
slow dial-up Internet connections and will not get broadband anytime
soon. Those with no access, or prohibitive access, will be silenced as
more communication, services and news media jump to the Internet. Not
only does the U.S. risk falling behind its partners and competitors, a
large swath of American voices will disappear if broadband is left to
network providers. That's a great loss for a democracy.
______
The Seattle Times--September 16, 2007
The Newspaper's View, Free the Internet. . .
Democracy is meaningless without structure. It requires support and
infrastructure to become a word capable of giving entire nations voice
and freedom.
The architects of America's democracy knew this. The Founding
Fathers made sure newspapers and magazines were widely distributed by
allowing periodicals to utilize low postage rates. Technologies like
the airwaves, which were enshrined as the public's ownership, have also
been federally regulated to be used as democratic tools.
Lawmakers have another opportunity to use technology to bring the
Nation's democratic discussion to more people. The Internet has become
home to modern-day pamphleteers, community discussion and innovation.
Like any valuable resource, the Internet is in need of protection.
The Federal Communications Commission and Congress can provide this
by passing an Internet-neutrality law. Congress can act this fall on a
net-neutrality bill sponsored by Sen. Olympia Snowe, R-Maine, and Sen.
Byron Dorgan, D-N.D., that is before the Commerce Committee.
Working against such common-sense legislation are corporations such
as Comcast, Verizon and AT&T. These corporate octopuses vehemently
oppose any laws that will erode their considerable influence as network
providers.
The legislation seeks to prevent companies from manipulating the
content that flows through the networks they have built. Currently,
there is nothing stopping Comcast from slowing down content it did not
create or from degrading content from competitors. AT&T illustrated the
danger when it deleted comments made by Pearl Jam singer Eddie Vender
during a concert webcast through its Blue Room Website.
Constructive regulation is needed to allow the Internet to grow and
mature. It has the potential to connect people from the country's
remote corners to residents of the biggest cities. The Internet is a
place where ideas catch fire, where like minds find refuge and debates
can rage. The Internet cannot belong to a couple of gigantic
corporations. A handful of telecommunication and cable companies should
not be entrusted with something as precious as our diverse, national
dialogue.
______
The Seattle Times--September 26, 2007
The Local Voice of Radio Has Been Muffled by Greed
By Bill Wippel Special to The Seattle Times
Local radio stations, left independent, are the best examples of
freedom and democracy. Most are located in small markets where they
mirror the community's image.
Take Pullman. Station KOFE in 1964 decided to turn over the entire
station's proceeds for one day to the local chamber of commerce.
chamber members bought spots and wrote their competitors' commercials
and read them over the air.
Seafirst Bank wrote: ``Pullman National Bank has a clock out front
because inside they won't give you the time of day!'' and, Pullman
National bank wrote: ``You think that thermometer out front gives the
temperature? No, it's Seafirst's rate of interest.'' (The broadcast was
made in July when the thermometer read 85.)
In all that fun, including newscasts read by chamber members
complete with botched pronunciations and laughter, $4,000 was raised.
It bought most if not all of the Christmas decorations for the town.
Earlier, in Pomeroy, Garfield county, which does not have a radio
station, KOZE in Lewiston, Idaho, broadcast a play-by-play description
of the Pomeroy Day Parade. The big news was that an area farmer had
paid cash that day for a new Edsel. Interviews of local folks made them
``famous'' in that small farming community!
Genesee, Idaho, never had a station, either. But once a year,
Pullman's KOFE did a broadcast from the farming community from 6 a.m.
to 6 p.m. for Genesee Days. No other commercials were broadcast except
those from Genesee. Crowds were huge.
Interviews with city leaders, farmers and business owners told of
the small town's pride and joy: wheat farming and soil conservation.
Owners of large radio conglomerates today would call this
``hokey.'' They would also call this exercise ``looking back, when we
should be looking forward.'' Today, many broadcasters exhibit just the
opposite of community resourcefulness. There are exceptions, but they
are few and far between.
There are radio stations located in the Seattle area that have left
their original City of license. Stations that used to broadcast the
hometown news and community events of suburban King, Pierce and Kitsap
counties now involve themselves almost solely with Seattle or some
other nonlocal focus.
None of this is illegal, thanks to the Federal communications
commission. The FCC has watered down what is required to receive a
radio--* broadcast license. Each station can renew its license by just
a postcard. No promise of news, community involvement or public service
is necessary to renew its license.
Proponents of further relaxation of FCC broadcast rules argue that
we have so many news venues that democracy is in good health.
Not when a few own so much of the media.
Imagine if Rupert Murdoch, coming off his acquisition of The Wall
Street Journal, added our local press or radio and television stations
to his worldwide stable of traditional and new media. Where would we
turn for diversity of coverage in news, sports and opinion? It would be
a catastrophe for the Puget Sound region.
We have allowed greed to replace enterprise. We have allowed the
local voice of radio, for all intents and purposes, to be stifled.
Guglielmo Marconi must be rolling in his grave. The voice of
democracy and independent thought on radio are all but dead.
Bill Wippel of Normandy Park has been in radio for 58 years and is
a former owner of KOFE in Pullman. He now directs Tape Ministries NW, a
nonprofit lending library of Christian books on tape for blind and
sight impaired people, www.tapeministries.org.
______
The Seattle Times--October 3, 2007
FCC Fiddles While Nation's Broadband Falls Behind
By John Muleta Special to The Seattle Times
As the economy of the mid-20th century boomed, government action to
provide consumers with free over-the-air television and radio changed
forever the way Americans engaged in the life of their nation.
For the first time, news and entertainment from around the corner
and around the world were delivered directly into our living rooms.
America became a truly interconnected society as our country's
perspective on events like the civil-rights movement and the Vietnam
War were defined by the widespread adoption and availability of free
consumer communication services.
In the 21st century, broadband has the potential to similarly
reshape our democracy through the interactive power of the Internet.
Unfortunately, there is growing evidence that the current Federal
Communications Commission (FCC) is failing the American people in
maximizing use of the airwaves to serve the ``public interest.''
When it comes to broadband communications, the FCC's policy is to
consistently favor media megaconglomerates by throwing up roadblocks to
competition and failing to protect consumers. The FCC has protected
entrenched incumbents by building an obstacle course for innovative new
entrants.
While the FCC coddles AT&T and Verizon, more than 100 million
adults and their children still do not have broadband connections, and
our country has fallen to 24th in the world--behind Estonia--in global
broadband-adoption rankings.
Congress has found that broadband services in the United States are
delivered by a duopoly of incumbent telephone and cable companies,
leading to high prices and low adoption rates. Prices for broadband
have only declined 10 percent over the past decade while prices for
computing have dropped by more than 90 percent. Computer makers are
regulated by the marketplace, while broadband providers are regulated
by the FCC--and therein lies the problem.
The result is that broadband adoption has stalled at below 50
percent while the economic and racial disparities in connectivity have
grown. In America today, poor, rural and black families have broadband
service at half the rate of their rich, suburban and white
counterparts. This is un-American and unacceptable.
Given this sad state of affairs, one might assume the FCC would be
open to considering new and innovative approaches to using America's
airwaves to spur broadband adoption. Sadly, this is not the case.
The experience of my company, M2Z Networks, is an example of how
hard it is for innovative ideas to enter the marketplace. Backed by the
same Silicon Valley innovators that brought you Amazon.com and Google,
we proposed to build a free, fast and family-friendly nationwide
wireless broadband Internet network without a government subsidy. Such
an innovative service would be an unprecedented step toward breaking
down the socioeconomic barriers that divide our country and extending
the great opportunities of broadband into the homes of every American
family.
Of course, these networks require licenses from the FCC to use the
public airways. After 16 months of inaction, the FCC recently announced
that it would need more time to consider our proposal--despite 50,000
Americans and hundreds of Federal, state and local officials telling
the FCC that our service was in the public interest.
Despite this overwhelming public support, the FCC sided with seven
incumbent telephone companies that said a slow decision on our license
application was in the public interest.
The real issue when it comes to broadband is that America's
airwaves are managed by an FCC that is content to fiddle while American
broadband falls behind.
The FCC's duty is to serve the public interest by promoting
competition and protecting consumers through the use of the ``public''
airwaves. It is high time the FCC act in the public interest of
American consumers and stop acquiescing to the special interests of
incumbent phone companies and media conglomerates.
John Muleta is co-founder and CEO of Silicon Valley-based M2Z
Networks (www.m2znetworks.com). He is a longtime Internet and
telecommunications entrepreneur who also headed the FCC's Wireless
Telecommunications Bureau between 2003 and 2005.
______
The Seattle Times--November 4, 2007
The Newspaper's View, Headlong into the Murk of Media
The Federal Communications Commission must slow down. Nothing good
can come from squeezing major changes to the laws that govern media
ownership by year's end.
FCC Chairman Kevin Martin wants a vote on media-ownership rules by
Dec. 18. Never mind that the FCC has not held its required sixth and
final hearing on media ownership. That hearing is now scheduled for
Seattle on Nov. 9.
Expect the hearing to be a rushed affair. An FCC hearing to explore
how broadcasters are serving communities was announced at the same time
as the Seattle media-ownership hearing. The broadcaster--or localism--
hearing was finalized the night of Oct. 24, giving the public only five
business days to prepare. The localism hearing was not only degraded by
its timing, but also by its venue. The hearing was tagged onto the end
of a regularly scheduled FCC meeting on Halloween.
There is no logical reason for Martin to be in such a hurry other
than to work something out for the sale of media conglomerate Tribune
to Chicago developer Sam Zell. Zell wants the deal to go through by the
end of the year. He also wants the deal to include Tribune's television
stations, many of which operate in the same cities as its newspapers.
The current FCC cross-ownership ban bars a company from owning a
television station and newspaper in the same city. Tribune has been
able to operate in a number of cities under the ban with a waiver that
does not transfer with the sale.
It is reasonable to believe Martin will be pushing the Commission
to drop the cross-ownership ban. In 2003, he voted with the former
Chairman Michael Powell to allow a company to own in one market a
newspaper, a television station, eight radio stations and an Internet
service provider.
These rule changes prompted the public to act through a court
challenge. The FCC was flooded with nearly 3 million letters in
opposition to the changes. Then, the 3rd Circuit Court of Appeals in
Philadelphia sent the rule changes back to the FCC.
The FCC should be more concerned about structuring rules that
ensure an independent and diverse press and media, and not so worried
about appeasing the conglomerates that believe a cross-ownership ban is
standing in the way of more revenue.
This is too important an issue to be rushed. The FCC needs to
facilitate a national discussion about how the American press and media
can best serve democracy. That cannot be achieved by Dec. 18.
______
The Seattle Times--November 4, 2007
The Newspaper's View, Defy News Corp.
News Corporation's purchase of Dow Jones signals a frightening new
phase of media ownership that demands scrutiny.
At least one person in a position to do something about it agrees.
Michael Copps of the Federal Communications Commission sent a letter
last week to FCC Chairman Kevin Martin asking that the commission take
a hard look at the sale of Dow Jones, which includes The Wall Street
Journal. Copps says that News Corporation's extensive media holdings
should be of concern. He is right. News Corporation's media holdings
are too prodigious for a democracy.
Unfortunately, it is not clear whether the FCC can do anything
about it. Martin is not likely to try to hold up the deal, and the FCC
does not have a nationwide cross-ownership rule that would prohibit a
company from simultaneously owning a national newspaper and a national
news station.
Just because there is no ban does not mean there should not be one.
The American press and media have been condensed into the grip of a
handful of companies. Rupert Murdoch's News Corporation already owns
everything you watch with the word FOX in the name. He also owns Direct
TV, MySpace, TV Guide and HarperCollins Publishing.
The acquisition of Dow Jones will solidify News Corporation as the
dominant news voice in New York City, and across the country.
Nationally, the Murdoch conglomerate will own the New York-based Wall
Street Journal, FOX News, and a soon-to-be-launched financial channel.
News Corporation already owns two television stations and a daily
newspaper in New York City.
The FCC should listen to Copps. News Corporation, or any company,
for that matter, need not have such a dominating media presence. It is
time the FCC expanded its local cross-ownership ban nationally to
ensure Americans are served by a dispersed, diverse press and media.
Senator Dorgan. Mr. Blethen, thank you very much for your
testimony.
Next, we will hear from Mr. Tim Winter, who is President of
the Parents Television Council.
Mr. Winter, you may proceed.
STATEMENT OF TIMOTHY F. WINTER, PRESIDENT,
PARENTS TELEVISION COUNCIL
Mr. Winter. Good day, Senator Dorgan, Chairman Inouye, Mr.
Vice Chairman, and Senators. Thank you for inviting me to be
here with you this morning. It is a personal honor for me to be
here once again before this committee on whose staff I had the
pleasure to serve under your good friend and former colleague
Warren Magnuson.
My name is Tim Winter, and I'm president of the Parents
Television Council, with more than 1.2 million members across
the United States. The PTC is a nonpartisan, nonprofit,
grassroots organization dedicated to protecting children and
families from graphic sex, violence, and profanity in
entertainment.
At first blush, there would seem to be very little
connection between the PTC's mission and the media ownership
issues which bring us here together today, but there is
compelling evidence that the consolidation of media outlets has
led to a coarsening of television content, a destruction of the
concept of community standards of decency, an unresponsive,
irresponsible news media that routinely ignores news stories to
protect its parent corporation, and a cable television industry
that effectively functions as a cartel.
Mr. Chairman, a few years ago the PTC stood shoulder to
shoulder with a remarkably diverse group of public policy
advocates to decry the loosening of media ownership rules--the
National Organization for Women and Concerned Women for
America, the Salvation Army and Common Cause, Consumers Union,
the National Rifle Association, MoveOn.org, and others. As PTC
founder Brent Bozell noted at that time, when all of us are
united on an issue, then one of two things has happened; either
the earth has spun off its axis and we've all lost our minds,
or there is universal support for a concept.
I believe the FCC's recent localism hearings across the
country have once again demonstrated universal support for a
concept. Big media companies have not conducted themselves in a
manner which merits them owning even more media outlets. The
strongest voices in favor of allowing big media companies to
grow even bigger have come from those within those very
companies.
Let me explain why the ownership issue is so important to
the Parents Television Council:
With very few exceptions, network-owned television stations
do not consider community decency standards, even though the
terms of their broadcast licenses demand it. During the summer
of 2003, the FOX Broadcasting Network aired an episode of a
crime show called ``Keen Eddie,'' where criminals trying to
sell horse semen on the black market hired a prostitute to
perform a particular act on the horse in order to extract the
semen. Although the act itself was not displayed on the
program, the dialogue was so coarse that I am uncomfortable
mentioning it here to you today. A member of the PTC in Kansas
City wrote a letter to the FOX-owned and operated television
station in his market, expressing his concern, and I wish to
read aloud the response he received from the station's general
manager, quote, ``We forwarded your letter to the FOX network.
The network, not the station, decides what goes on the air for
the FOX-owned and operated stations.''
When station general managers in cities and towns across
the country take their orders directly from headquarters in New
York or Hollywood, it comes as no surprise that they would toe
the company line with programming decisions. How does this
serve the public interest?
We have heard repeatedly and privately from independent
local broadcasters around the country who are threatened, by
the major networks, that they will lose their affiliate status
if they preempt network programming. Fortunately, there are a
few notable exceptions of broadcasters pushing back on the
networks, including Mr. Goodmon here and others like Pappas
Communications. But when local programming decisions are
dictated or prohibited by corporations thousands of miles away,
the public interest cannot be served.
Media consolidation has led to a self-serving news media
that seeks to protect interests of their own corporate parents.
When the broadcast networks recently challenged the FCC's
ability to enforce indecency standards, they convinced two
Federal judges in New York City that they have the right to air
the ``F'' word at any time of day, even when they know millions
of children are watching.
Although dozens of concerned family groups, including the
PTC, were shocked that a court could reach such a preposterous
conclusion, there has been only limited public outcry over that
decision. The reason for this is simple. In large measure, the
American people don't know that it has happened. In the wake of
that court decision, not a single national news broadcast
organization saw fit to cover the story, and, even with a host
of 24-hour-a-day news channels on cable, there was near-zero
coverage of a decision that will impact every family in the
country, as well as the policies determining appropriate use of
the airwaves that they themselves own.
Why no coverage? We believe that the corporate news
divisions knew the public would be incensed by the arrogance of
a media conglomerate arguing for the right to air profanity in
front of their children early in the day over the airwaves that
they own.
It should be noted that the Second Circuit ``F''-word
lawsuit and the now-pending Third Circuit lawsuit, which
alleges that the Janet Jackson Super Bowl striptease was not
indecent, were not brought by local broadcasters, like Mr.
Goodmon here; rather, these lawsuits were filed by the major
television networks, those same corporations who now want an
even greater control of America's media.
If you think media consolidation has stifled the broadcast
industry, please listen carefully to the following statistics
on cable. At my office in Los Angeles, there are 48 cable
networks bundled together on the expanded basic cable tier. Of
those 48 cable networks, Viacom owns all or part of eight of
them, NBC owns all or part of eight of them, Disney owns all or
part of eight of them, News Corp. owns all or part of six,
Liberty Media owns all or part of six, and the local cable
operator, Time Warner, owns all or part of seven of them. By
using the retransmission consent rules, these conglomerates are
able to use their TV station broadcast licenses in an
extortion-like way to force unwanted cable networks onto our
cable systems and onto our cable bills.
There has been much attention paid recently to the
acquisition of the Wall Street Journal by News Corporation.
Imagine the outrage if Mr. Murdoch demanded that subscribers to
the Journal now take and pay for the New York Post. But that is
precisely what he is doing with his new FOX business network.
News Corporation is able to force its new business network onto
cable systems across the country, regardless of whether a
single consumer wanted another business cable network. Such
bundled programming arrangements may be great for Wall Street,
but not for Main Street, and it does not serve the public
interest.
There has been a great deal of discussion about the lack of
diversity in the American media landscape as it relates to the
ownership of media properties. And rightfully so. Most
Americans can name one network that caters to African
Americans: BET. But can you name a second or a third? You
can't, because they simply don't exist as an option on most
basic cable systems. The Black Family Channel, the only black-
owned and operated cable television network for African-
American families, is now only distributed via the Internet.
Because it is independently owned and cannot apply the same
bundling leverage that conglomerates can, Black Family Channel
was effectively shut out from carriage. In an environment
dominated by media giants, there has developed no market that
would allow additional minority programming to be created and
distributed.
Mr. Chairman, how can media conglomerates be afforded the
additional public trust to hold even more broadcast licenses
when they behave in this manner? This committee, the Congress,
and the FCC must work in concert to protect the interests of
the public, the very owners of the airwaves. In the strongest
terms, I urge the Congress to consider these issues carefully
as it evaluates any appropriate action on the issues of
localism, diversity, and media ownership.
Thank you.
[The prepared statement of Mr. Winter follows:]
Prepared Statement of Timothy F. Winter, President,
Parents Television Council
Good day, Mr. Chairman, Mr. Vice-Chairman and Senators. Thank you
for inviting me to be here with you this morning. It is a personal
honor for me to appear once again before this Committee, on whose staff
I had the pleasure to serve under your good friend and former
colleague, Warren Magnuson.
My name is Tim Winter and I am President of the Parents Television
Council. With more than 1.2 million members across the United States,
the PTC is a non-partisan, non-profit, grassroots organization
dedicated to protecting children and families from graphic sex,
violence and profanity in entertainment.
At first blush, there would seem to be little connection between
the PTC's mission and the media ownership issues that bring us together
today. But there is compelling evidence that the consolidation of media
outlets has led to a coarsening of television content, a destruction of
the concept of community standards of decency, an unresponsive,
irresponsible news media that routinely ignores news stories to protect
its parent corporation, and a cable television industry that
effectively functions as a cartel.
Mr. Chairman, a few years ago the PTC stood shoulder-to-shoulder
with a remarkably diverse group of public policy advocates to decry the
loosening of media ownership rules: the National Organization for Women
and Concerned Women for America, the Salvation Army and Common Cause,
Consumers Union, the National Rifle Association and MoveOn.org. As PTC
Founder Brent Bozell noted, ``When all of us are united on an issue,
then one of two things has happened. Either the earth has spun off its
axis and we have all lost our minds, or there is universal support for
a concept.'' I believe the FCC's localism hearings across the country
have once again demonstrated universal support for a concept: big media
companies have not conducted themselves in a manner which merits them
owning even more media outlets. The only voices in favor of allowing
big media companies to grow even bigger has come from voices within
those very companies.
Let me explain why the ownership issue is so important to the
Parents Television Council. With very few exceptions, network-owned
television stations do not consider community decency standards, even
though the terms of their broadcast licenses demand it. This is not
just a problem in a small number of markets, but rather it is a problem
across this Nation. Four years ago the PTC conducted a survey of
approximately one hundred television stations around the United States
which were owned and operated by one of the four major television
networks. That survey concluded that only one station--in one
instance--had ever preempted a network program based on community
standards of decency, and that one instance occurred over a dozen years
ago.
During the summer of 2003, the Fox Broadcasting Network aired an
episode of a crime show called Keen Eddie. Criminals trying to sell
horse semen on the black market hired a prostitute to perform a
particular act on the horse in order to extract the semen. Although the
act itself was not displayed, the dialog was so coarse that I am
uncomfortable repeating it here. A member of the Parents Television
Council in Kansas City wrote a letter to the Fox owned-and-operated
station in his market, WDAF-TV, expressing his concern for such content
airing at 8 p.m. I wish to read aloud the response he received from the
station's General Manager in a letter dated July 25, 2003:
``We received your letter dated June 30, 2003 regarding the content
of the Keen Eddie show that aired on June 10, 2003 at 8pm. We forwarded
your letter to the FOX Network. The Network, not WDAF TV4, decides what
shows go on the air for the FOX Owned and Operated Television
Stations.''
When station general managers in cities and towns across the
country take their programming orders directly from the network
headquarters in New York or Hollywood, it comes as no surprise that
they would toe the company line. How does this serve the public
interest?
We have heard privately--and repeatedly--from independent local
broadcasters around the country who are threatened by the major TV
networks that they will lose their affiliate status if they preempt
network programming. Fortunately there are a few notable exceptions of
broadcasters pushing back on the networks, including Capitol
Broadcasting's Mr. Goodmon, and others like Pappas Communications. But
when local programming decisions are dictated or prohibited by a
corporation often thousands of miles away, the public interest cannot
be served.
We have also seen instances of bad faith by TV station duopolies:
i.e., where one company owns two (or more) TV stations in the same
city. In those instances, network affiliates preempted programs,
allegedly for indecency reasons. But those very same programs, deemed
too indecent for one station, aired in their entirety on the other
station in the same city owned by the same parent company. This
programming sleight-of-hand is nothing more than a publicity stunt,
intended to garner higher ratings for the non-network-affiliated
station. This does not serve the public interest; it exploits the
public interest.
Media consolidation has led to self-serving news media that seek to
protect the interests of their own corporate parents. The FCC has been
empowered by Congress to uphold broadcast decency standards on the
public airwaves at the times when children are most likely to be in the
audience and the Supreme Court has upheld Congress' right to do so.
Unfortunately, the broadcast networks have challenged the FCC's ability
to enforce these standards and even convinced two Federal judges in New
York City that they have a ``right'' to air the F-word at any time of
day, even when they know millions of children are watching. Although
dozens of concerned family groups, including the PTC, were shocked that
a Federal court could reach such a preposterous conclusion, there has
been only limited public outcry over that decision. The reason for this
is simple: in large measure, the American people don't know that it has
happened. In the wake of that court decision, not a single national
broadcast news organization saw fit to cover it, and even with a host
of 24-hour-a-day news channels on cable, there was near zero coverage
of a decision that will directly impact every family in the country as
well as the policies determining appropriate use of the airwaves that
they themselves own.
Why no coverage? We believe that the corporate news divisions did
not cover their parent companies' lawsuits because they knew the public
would be incensed by the arrogance of a media conglomerate arguing for
the ``right'' to air profanity in front of their children early in the
day over the airwaves that they--the public--own. In those instances
where it has been mentioned in the print media, the story has been
intentionally watered down and presented as a ruling on so-called
``fleeting'' profanity. This is ironic considering that all profanity,
by its very nature, is fleeting.
It should be noted that the Second Circuit F-word lawsuit, and the
now-pending Third Circuit lawsuit alleging that the Janet Jackson Super
Bowl striptease was not indecent, were not brought by broadcasters like
Mr. Goodmon. Rather, these lawsuits were filed by the major television
networks: those same corporations who want an even greater share of the
media industry.
The proposed elimination of the newspaper cross-ownership rule
threatens the important check that media outlets have on each other. If
a television station and newspaper in a given market share ownership it
follows that they will share editorial outlook on policy. Even if they
don't, how likely is it that a newspaper would criticize a local
broadcaster for anything--much less a violation of community standards
of decency--if both entities are owned by the same company?
Recently, I was told by a reporter who covers entertainment news
for a prominent newspaper that his stories had been edited or even
killed when they were unflattering to television programs produced by,
or airing on, its television network.
Some argue that a newspaper and a TV station in the same market may
find economic efficiencies in news gathering. I do not believe,
however, that in such a case the corporate interest outweighs the
public interest. Much as networks have a chokehold over the programming
decisions of their affiliates, so too would an ownership group exercise
editorial control over its media properties in the same market. Other
public interest groups with greater expertise in this area have
testified powerfully on this effect before the FCC over the past year.
I'd like to illustrate another way in which media consolidation has
an adverse affect on families.
If you think media consolidation has stifled the broadcast
industry, please listen carefully to the following statistics on cable.
At my office in Los Angeles, there are 48 cable networks bundled
together on the expanded basic cable tier. Of those 48 cable networks,
Viacom owns all or part of 8 of them; NBC owns all or part of 8; Disney
owns all or part of 8; News Corporation owns all or part of 6; Liberty
Media owns all or part of 6; and the local cable operator, Time-Warner,
owns all or part of 7 of those networks. By using the retransmission
consent rules, these conglomerates are able to use their TV station
broadcast licenses in an extortion-like way to force unwanted cable
networks onto our cable systems and onto our cable bills.
There has been much attention paid recently to the acquisition of
The Wall Street Journal by News Corporation. Can you imagine if Mr.
Murdoch demanded that subscribers to the Journal must now take and pay
for the New York Post? Of course not. But that is precisely what he is
doing with his new Fox Business Network. News Corporation is able to
force its new business network onto cable systems across the country,
regardless of whether or not a single consumer wanted another cable
business news network. And if, by using its broadcast network as
leverage, it is able to charge the same 90-cents-per-month fee that the
other business news network, CNBC, receives, it will be on a path to
fleece several hundred million dollars each and every year from
consumers--before a single penny of advertising is sold. This holds
true for all networks owned by major media conglomerates, which
comprise upwards of 90 percent of all cable television content, because
they are only sold to distributors in this bundled way. Consequently,
consumers and families have no ability to make a market-based decision
about what programming to choose and pay for and are forced to pay for
enormous amounts of unwatched, unwanted programming just to access what
they may be interested in. These bundled programming arrangements may
be great for Wall Street, but it is not good for Main Street, and
clearly it does not serve the public interest.
There has been a great deal of discussion about the lack of
diversity in the American media landscape as it relates to the
ownership of media properties, and rightfully so. Most Americans can
name one network that caters to African-American audiences, but can you
name a second or a third? You can't, because they simply don't exist.
For example, the Black Family Channel, the only black owned and
operated cable television network for African American families, is now
only distributed via broadband Internet. Despite years of success, it
was effectively shut out from carriage on many cable platforms because
it is independently owned and thus could not leverage itself in the
same way conglomerate-owned programming does. In an environment
dominated by media giants, there has developed no free market in
programming that would compel additional minority programming to be
created and distributed. Again, the solution is simple: allow consumers
to make their own decisions about what programming they want to pay
for.
Rather than take their public interest obligations seriously, the
broadcast networks have exhibited a pattern of behavior that reflects
contempt for the owners of the very airwaves from which they profit. In
November 2004, Viacom--then the corporate parent of the CBS television
network--entered into a Consent Decree with the FCC wherein it admitted
airing indecent material, paid a fine and committed itself to a
detailed compliance plan to prevent the further airing of indecent
material.
There is no evidence that compliance plan was followed, and just
within the past 2 weeks, CBS meekly explained to the FCC that it
understood the terms of the Consent Decree applied only to live
programming. Since it was CBS' own attorneys who negotiated the terms
of this contract and there is no such stipulation in it, it is
preposterous and outrageous that CBS made this claim. If media
conglomerates cannot be trusted with something as simple as making a
good faith effort to prevent the airing of indecent material, then how
can they been trusted to be good stewards of the public airwaves and
given even more access to them?
I sat in this very room a few years ago when FCC Commissioner Copps
reminded this Committee that the term ``public interest'' appears no
less than 112 times in the original Communications Act. Can this
Committee and the FCC forthrightly assert that the corporate interests
have conducted themselves in a manner that truly serves the public
interest, so that they should be given the additional public trust to
hold even more broadcast licenses than they do today?
My answer to this question is an emphatic NO, they have not. In
fact the major media conglomerates which now hold so many broadcast
licenses have not only failed to act in the public interest, they have
repeatedly acted with complete and utter disregard for the public
interest. Not only have many acted in such a manner as to be denied any
additional licenses, others have acted, and continue to act, in such a
manner as to warrant the suspension or revocation of their existing
licenses.
This Committee, the Congress and the FCC must work in concert to
protect the interests of concerned families--the very owners of the
airwaves--and not merely grant every wish conjured up by those who
would exploit their use of this precious resource.
In the strongest terms, I urge the Congress to consider these
issues carefully as it evaluate any appropriate action on the issue of
localism, diversity and media ownership.
Thank you.
Senator Dorgan. Mr. Winter, thank you very much.
Next, we will hear from Mr. Jim Goodmon, President and CEO
of Capitol Broadcasting Company, in Raleigh, North Carolina.
Mr. Goodmon, you may proceed.
STATEMENT OF JAMES F. GOODMON, PRESIDENT AND CEO, CAPITOL
BROADCASTING COMPANY, INC.
Mr. Goodmon. Chairman Inouye, Chairman Stevens, Senator
Dorgan, and Senators, thank you very much.
My name is Jim Goodmon. I am President of Capitol
Broadcasting Company, in Raleigh, North Carolina. We own radio
and television stations in North Carolina. It's a family owned
company. I'm proud to say I'm the third generation of my family
to operate the company. The fourth is on the payroll, sent me a
memo this week that he wasn't paid enough. I got real mad,
until I remembered I sent the same kind of memo to my
grandfather. So, we'll get through it.
Now, I am the self-appointed number-one fan of digital
television in the U.S. of A. WRAL TV in Raleigh was the first
television station in the United States to go digital high
definition. I think it's the greatest thing that's ever
happened to broadcasting. I think it means broadcasting is
relevant now into the digital future, and it's just wonderful.
You're going to think I'm nuts when I tell you I almost started
crying, Sunday, in the New England/Indianapolis game, because
of that beautiful high definition. Did you see it in high
definition? Do you realize how much better we are in high--I
mean, it's just--digital television works.
Now----
Senator Kerry. I thought you were going to cry because New
England was behind for a while.
[Laughter.]
Mr. Goodmon. OK. It was just--it was just terrific. I've
never seen pictures like that.
OK. Now, I want to tie digital television into ownership
and localism. The first point I want to make is, we're getting
ready to go digital. We're going to turn off our analogs, early
2009, and we're going to be a digital broadcast universe.
Now, we're not sure how that's going to come out. But,
remember, I own one TV station, one analog. When I go digital,
I'll own four TV stations. I mean, ownership is changing, just
because we're going to digital. Now, I can't tell you how
that's going to work out. But, you know, we're all going to be
high definition, we're going to do multicasting--what's all
going to happen to that. But going to digital is going to be a
big change, and there are lots of unknowns. And, by the way,
we're digital radio now. You know, my digital FM station--I
have a FM analog station, I have a digital FM station.
Remember, that's two more stations. So, I don't own one FM
station, I own three. Right? And there are going to be lots of
changes. How is all this going to come out?
So, my point is, we're at the end of an era. Right? Things
are going to really change. So, why in the world would you
change ownership now? I mean, we've finished with that other
time, and we're going into a new era, and we really all need to
see what's going on before we look at ownership. Doesn't make
sense to me to work on ownership now.
Now, OK, if you don't buy that, let's talk about how we got
into so much trouble in the last ownership proceeding. The way
we got into so much trouble is, we had a group off working on
radio, and, you know, how many radio stations can you own? And
they thought about it, and worked and worked on it. Then we had
a group saying, how many TV stations can you own? And they
worked on that. And then we had a different group saying,
``Well, you know, you ought to let TV stations own
newspapers,'' and they worked on that, and they fought and they
fought. They put all that together, right? The first time
anybody had ever seen it was when it was all together on a
piece of paper. And what they said was, ``You can own two TV
stations. In some markets, you could own three. You could own
eight radio stations. Same market now. Two or three TV
stations, eight radio stations, and the local newspaper.'' I
mean, that is such local dominance nobody could--that's why
everybody fell to pieces.
Senator Dorgan. Mr. Goodmon----
Mr. Goodmon.--when you put it together.
Senator Dorgan.--and the cable company, in the same
community.
Mr. Goodmon. Right. I was going to--you know, the cable
company was not an FCC ruling, it was a court ruling. You know,
we've got to get Justice to work on that.
So, what could happen in my market is, I could own the
cable company--or, let's say the cable company could own two
television stations, five or six radio stations, and the local
newspaper. Now, that's beyond--when you put all that together,
it doesn't make any sense.
So, the notion that the Chairman wants to just talk about
newspapers, that also doesn't make any sense to me. If we're
going to work on ownership, we've got to put it, you know,
together. We've got to put all that stuff together and say, how
does all this work? And I'm not talking--you know, cable
channels, Internet sites, magazines--you know, it goes on and
on and on.
That's my first two reasons. We're doing a digital
transition, and, second, we're not doing it all at the same
time.
If I haven't convinced you with the first two, the third
is, if you just want to talk about newspapers--and it kind of
bothers me to say this, being a broadcaster--the newspaper, the
local newspaper sets the local agenda. In the broadcasting
business, we're the breaking-news people. We're going to give
you the spot news before anybody else. That local newspaper
sets the local agenda. They are the power, they're the
political power in the market. And I don't know why we also
want to let them have television. I--that's just kind of a--I
don't get that, because they're already the most powerful crowd
in town, in terms of the political agenda.
So, I'm just saying, even if you don't like the first two
things I'm talking about, I don't see letting a newspaper have
two TV stations and five radio stations and the cable company.
That just doesn't make sense.
Now--so, what we need to do--here's the plan. We're getting
ready to go to digital. Now, before we go to digital, we need
to do the minimum public-interest standards proceeding that's
before the Commission. Y'all--everybody sort of fusses at us
about not doing a good job. You've got to remember, there
aren't any standards. There aren't any public-interest
standards for digital broadcasting. I've been a digital
broadcaster for 10 years, and there aren't any public-interest
standards. And we've been asking the Commission, ``OK, guys,
let's do public-interest standards. Tell us what you want us to
do.'' And we've also said, ``By the way, you know, we've got
people who say broadcasters do a good job, broadcasters do a
bad job.'' I'm on the ``Do a better job''--I'm on the ``Do a
good job,'' but, in any event, nobody knows, because there is
no reporting. So, we've got a proceeding at the Commission, on
disclosure. So, we do minimum public-interest standards, we
come up with the disclosures so we can really see how we're
doing, some information that makes sense, we do the digital
transition, and then we look at ownership. Right? To me,
considering ownership now is just--it's just out of order. I
mean, it's just out of logical order to get us to the digital
transition. Right? So, that's my story, and I'm sticking to it.
I'll be happy to answer any questions. Thank you.
[The prepared statement of Mr. Goodmon follows:]
Prepared Statement of James F. Goodmon, President and CEO,
Capitol Broadcasting Company, Inc.
My name is Jim Goodmon. I am President & CEO of Capitol
Broadcasting Company, Inc., and I am proud to say that I am the third
generation in my family to serve as President. Capitol operates radio
and television stations in North Carolina.
Personally, I have never been more excited about broadcasting. As
many of you may remember, I am the self-appointed nation's most
enthusiastic digital television cheerleader. WRAL-DT signed on July 23,
1996 becoming the Nation's first commercial high-definition (``HD'')
television station. In 2001, WRAL-DT began multicasting allowing our
viewers to watch CBS network and local programming in HD on one channel
and 24-hour local news, sports and weather in standard definition on
another channel. When needed, WRAL-DT can become four or more stations
giving our viewers additional local and/or diverse programming.
Three and a half years ago I testified before this Committee on the
same issues being addressed at today's hearing. Much of my testimony
remains the same, but there are two striking differences. First, by
11:59:59 p.m. on February 17, 2009, television broadcasters must turn-
off their analog channels signaling the end of one era and the
beginning of another. Second, digital radio is now a reality with over
1500 radio stations broadcasting in HD. As broadcasters move from
analog to digital, now is not the time to revise the media ownership
rules.\1\
---------------------------------------------------------------------------
\1\ The one exception to this is the so-called UHF discount rule.
Pursuant to the UHF discount rule, UHF television stations continue to
be attributed with only 50 percent of the television households in
their Designated Market Areas (``DMAs'') for purposes of calculating
the 39 percent national television ownership cap. Many VHF analog
stations are (or will become) UHF digital stations, so it is very
important that the UHF discount issue be resolved prior to February 17,
2009 for calculation purposes.
---------------------------------------------------------------------------
That is my first point today--I repeat, with the transition to
digital, now is not the time to revise the media ownership rules. As
previously noted, WRAL-DT is actually two channels and can be three,
four or more, and many HD radio stations are already offering two or
more channels, including WRAL-FM. In effect, Capitol's two digital
television stations in Raleigh-Durham can be eight television channels,
and its two radio stations can be six or more radio channels. I urge
Congress and the FCC to wait and carefully evaluate the impact of the
digital transition on localism, diversity and competition before
changing the current media ownership rules.
My second point is that the media ownership rules remanded by the
Third Circuit must be resolved by the Commission in a comprehensive
fashion, taking into consideration the interrelationship between the
various rules on a national, state and local level. In 2003, although
the Commission reviewed its new media ownership rules individually,
with guidance from the now infamous Diversity Index, there is no
indication that the Commission analyzed the collective impact of the
new rules on the public interest and the Commission's core values of
localism, diversity, and competition. Applying the Commission's new
2003 rules, in Raleigh-Durham, Capitol could own two television
stations; five or more radio stations; and the Raleigh and Durham daily
newspapers, The News & Observer and the Durham Morning Herald
respectively. In North Carolina, Capitol could own 11 television
stations; more than 30 radio stations; and the daily newspapers in
Raleigh, Durham, Charlotte, Asheville, Greensboro, High Point and
Winston-Salem. Without antitrust intervention, Capitol could also own
Time-Warner Cable and an unlimited number of cable channels, Internet
websites and magazines.
By ignoring the interplay of its new rules, the Commission violated
its own stated policy of concentrating too much potential power in the
hands of a single media outlet and created the absurd results noted
above. The Commission's 2003 Media Ownership Order \2\ notes the
following at 28, 29 and 38:
---------------------------------------------------------------------------
\2\ See 2002 Biennial Regulatory Review--Review of the Commission's
Broadcast Ownership Rules and Other Rules Adopted Pursuant to Section
202 of the Telecommunications Act of 1996, 18 FCC Rcd 13620 (2003)
(``2003 Media Ownership Order''), aff'd in part and remanded in part,
Prometheus Radio Project, et al., v. F.C.C., 373 F.3d 372 (2004), stay
modified on rehearing, No. 03-3388 (3d Cir. Sept. 3, 2004), cert.
denied, 73 U.S.L.W. 3466 (U.S. June 13, 2005) (Nos. 04-1020, 04-1033,
04-1036, 04-1045, 04-1168, and 04-1177).
Further, owners of media outlets clearly have the ability to
affect public discourse, including political and governmental
affairs, through their coverage of news and public affairs.
Even if our inquiry were to find that media outlets exhibited
no apparent ``slant'' or viewpoint in their news coverage,
media outlets possess significant potential power in our system
of government. We believe that sound public policy requires us
---------------------------------------------------------------------------
to assume that power is being, or could be, exercised.
The record contains evidence that reporters and other employees
of broadcasting companies alter their news coverage to suit
their companies' interests. This suggests that whatever
financial interest that media companies may have in presenting
unbiased news coverage, those incentives are not the only
factors that explain news coverage decisions.
As we have explained, ``the greater the diversity of ownership
in a particular area, the less chance there is that a single
person or group can have an inordinate effect, in a political,
editorial, or similar programming sense, on public opinion at
the regional level.''
In 2007, let's not repeat the mistakes of 2003. Because of the
overlap among various media ownership rules, a holistic, harmonized
approach is required to comply with the Third Circuit's remand.
My third point is minimum public interest standards and reporting
requirements are needed for digital broadcasters. The Commission's
digital pubic interest notice of inquiry was adopted in 1998, a
standardized disclosure rulemaking was adopted in 2000, and the
localism notice of inquiry was announced in 2003 and adopted in 2004. I
urge the Commission to complete these three rulemakings before moving
forward with any changes to the media ownership rules. As I noted
earlier, WRAL-DT has been on the air for more than a decade without
digital public interest rules.
Every broadcaster I know, myself included, believes they are
following the Commission's rules and doing a good job of serving their
local communities, but there is always room for improvement. The
problem is as I see it that we are an industry with few standards . . .
either mandatory or voluntary . . . and with only a few exceptions, we
don't really know what is expected of us. The Commission's present
reporting system does not provide much information, so we really don't
know how well we are doing.
Minimum public interest standards will make clear to all
stakeholders of the public airwaves what is expected. Will broadcasters
do more than the minimum? Yes, I think we will. Over the course of the
last few years, the public--our viewers--have become increasingly aware
that the airwaves belong to them and that we, as broadcasters, are
accountable. Standardized reporting and defined minimum standards will
at least give them and us a way to begin measuring how well we are
doing.
In addition, stations should be required to develop methods for
determining or ascertaining the primary issues, needs and interests in
the community. Public input should be invited on a regular basis to
serve as a guideline for stations to address those community interests
through news, public service announcements, and public affairs
programming. And then, on a quarterly basis, station licensees should
report to the FCC and the public on how ascertained needs are being
served through local programming.
To summarize, I respectfully submit that the Commission should
complete its public interest and localism proceedings before the
Commission addresses media ownership changes; the Commission should
understand the impact of the digital transition on localism, diversity
and competition before changing its media ownership rules; and the
Commission should do a comprehensive review of the media ownership
rules to understand the interplay of the rules to avoid the results
created in the 2003 proceeding.
Thank you for inviting me to testify today. I look forward to your
questions.
Senator Dorgan. Mr. Goodmon, thank you very much for your
testimony.
And, finally, we will hear from Mr. John Lavine, the dean
of the Medill School at Northwestern University.
Mr. Lavine. Thank you, Mr. Chairman. Good morning.
Senator Dorgan. Mr. Lavine, you may proceed. Thank you very
much.
STATEMENT OF JOHN LAVINE, DEAN, MEDILL SCHOOL OF JOURNALISM,
NORTHWESTERN UNIVERSITY
Mr. Lavine. Good morning, members of the Committee. I am
the dean of the Medill School at Northwestern, but this morning
I speak only for myself.
I'm pleased to be here. I want to talk about one facet of
all of this, which is the newspaper/broadcast cross-ownership
ban.
I know it's popular to say that the--and it's almost the
accepted wisdom--that the ban is in the public interest. But
the facts, which were referred to earlier this morning, simply
paint an opposite picture. So, let's look at some of the facts.
The court decision that brought all this back--singled out
the ban and said that it was not necessary to localism and
diversity, and singled out that it ought to be reviewed
separately.
By the way, as an aside, I think that in 50 years, no
broadcaster has ever bought a newspaper. But that's a fact that
just fits in the picture.
Let me tell you, however, that my feelings about this are
not simply academic. In 1974, I bought a daily newspaper, in
northern Wisconsin, the newspaper owned a radio station. At
that time, I said, ``No, I don't want to buy the radio
station.'' And that was a year before the ban. I could have,
but it didn't seem to me right for one person to own the radio
station and the newspaper in a small town, so I didn't. But
that was then, and this is now. And what was right then is not,
in my opinion, right today.
Let me explain. In the testimony that I've submitted, in
the appendices, you will see that the facts, again, simply blow
up the myth that media competition in Shawano, Wisconsin, or
Chicago, where I now live, has not exploded in the years since
1974. So, what would have been one owner owning all the outlets
in 1974 is just the opposite today.
But what is not growing, and what is not changing, is
watchdog, penetrating, trustable journalism that enhances
public knowledge and the lives of citizens. I would argue that,
thinking about this subject, that ought to be the place we
start these considerations. We ought to start with how can we
have an informed citizenry? And what are the facts? The facts
are that people today have almost no local news from local
radio in middle and small markets, and only a handful of news
stations in major markets do really informed, original news,
not syndicated, on the radio side. Television, in net terms,
does about 22 minutes of news in a half hour of show, which
simply means that the preponderance of covering the news falls,
indeed, to local newspapers.
So, what are the economics of newspapers? Eighty to Eighty-
five percent of every revenue dollar for a newspaper comes from
advertising. For most paper, if they are lucky, circulation
pays for the paper on rolls and the ink in barrels, that's it.
Advertising pays for everything else. And, in advertising,
classified is the big profit engine to buoy up the newspaper.
And classified advertising has taken, of course, enormous hits
with the Internet. Craigslist has taken nearly $100 million out
of San Francisco in the past year alone. It is not small wonder
that that newspaper is losing the kind of money it is. Think of
the list--gone are Knight-Ridder and Pulitzer. Split into two,
Scripps and Belo. Dropping--amazingly, dropping out of TV and
selling several hundred radio stations, Clear Channel. Emison,
the New York Times, out of television. Troubled, the Tribune.
And most of America's daily newspapers are not large.
Seventy-five percent of them are under 50,000 circulation, 50
percent of them are under 25,000 circulation. Their markets are
really struggling. These are not myths. These are facts.
So, if this continues, and we're going to have an informed
public, what role do the newspapers play? Let me take a moment
on that with some examples.
Yesterday in my town, Senator Klobuchar's story about
unsafe toys from this committee was front-page news in the
Tribune. Today's story is the same, and you saw the story on
the front of the USA Today about people falling asleep running
America's air traffic system. Then there are terrific stories
about Major League Baseball and steroid use; indeed, in San
Francisco, where all of those problems are. Let's not go
overboard. Big media is not always bad. You have a
responsibility, we all do, to ensure that when Katrina comes or
there are stories like ones I just listed or when there are
these big national stories happen or a war takes place, there
are big media to cover them. But if we care about the small,
rising citizen media--and I sure do--they too most desperately
need the big media to cover the 24/7 and then let the citizen
media go deeper in their communities or analyze what comes out.
There is no way that bloggers or anyone else can cover my town
like the major media can, but, boy, they can add a whole lot
once the major media has laid out what's going on.
And do not think, by the way, that Yahoo! or Google are
going to be able to replace all of that. They don't originate
anything. They rely on the media, large and small, for whatever
they present.
So, that leads me to two final points. One, what happens if
we do away with the cross-ownership ban? Members of the
Committee, I must tell you, you have an answer to that. You
have an amazing answer to that. For 32 years, we have had
grandfathered newspaper and radio or television stations cross-
owned in this country in significant number, and there are a
whole set of studies, including the FCC's own studies, that say
that cross-owned papers and stations did, always, a better job
of covering politics and news and public affairs, because they
are owned by news companies. So we don't have to guess what's
going to happen. We have the perfect experiment. We had markets
where cross-ownership was blocked, and we had ones where cross-
ownership was not blocked, and the ones that were cross-owned
did a better job. If that isn't in the public interest, I
just--I don't know what is. I do know, at the same time,
however, that only in big cities are those news stations in
existence. And I worry desperately that, in Shawano, Wisconsin,
where I didn't buy the station, today radio has one
newsperson--one--and there are four stations today. They have
one newsperson, who basically covers sports. The only way there
is a chance for the people in that town to know what's going on
is the newspaper and its news staff and the one news
broadcaster to team up to give that area news that really
matters.
And, finally, my other point is, let's talk about minority
ownership. I think it is just scary, disgraceful, that we would
all say, ``This is very important''--I say it, I know you say
it, we all believe it--and yet, the cross-ownership ban stops
minority daily newspapers from owning a radio station in their
own community. It makes no earthly sense to me that the energy
behind a Black or Latino or Native American or Asian newspaper,
the fulcrum of the community, cannot own a radio station to
better serve that community's interests. It just makes no
sense. We can't have that happen, because those entities are
also part of the same economics affecting the entire industry
and because of this ban.
So, in closing, I urge you to recognize the myths and
embrace the facts and allow the FCC to look at what they've
been looking at for 10 years, and finish it, the cross-
ownership ban must go. It's been on the books for three
decades. For all the reasons I've cited, it doesn't work. And
we must, in the public interest, to have informed citizens,
drop that ban so that we can get news in most of the towns in
America where it now doesn't exist.
Thank you.
[The prepared statement of Mr. Lavine follows:]
Prepared Statement of John Lavine, Dean, Medill School of Journalism,
Northwestern University
Good morning, Mr. Chairman, I am John Lavine, the Dean of the
Medill School of Journalism at Northwestern University, but this
morning I speak only for myself, and I am pleased to be here.
First when I was a journalist and now as a professor of journalism
and media strategy, I have two overriding passions:
To foster penetrating, watch-dog, trustable journalism that
enhances public knowledge and the lives of citizens.
To educate the next generation of journalists and media
leaders so they can share these goals.
The foundation for my comments today are those goals--which I hope
you share--and I will focus solely on the decades-old, newspaper/
broadcast cross-ownership ban.
It may be popular to say that the ban is in the public interest . .
. but the facts support the opposite conclusion.
My comments are not just academic; they are also based on real-
world experience.
At the end of 1974, I completed negotiations to purchase the
Shawano Leader, a small daily newspaper in Wisconsin.
As part of that purchase, I said ``No'' to buying the only local
radio station because I believed that it was not good for the community
to have one owner for its two news outlets.
That was the right decision then. . . . It is the wrong decision
today.
Why? . . . Because there has been an intervening explosion in
``traditional media'' voices and digital media have changed our world.
Here are five standards that you should consider if you truly want
free, quality broadcast news in the public interest:
1. Increase media competition.
2. Remove this ban to allow the public to receive more local
news--when and how they want it.
3. Remove the cross-ownership ban to enhance minority and news
organizations' voices.
4. Even though it seems contradictory--protecting the public
interest requires that you ensure that large, quality news
organizations endure.
5. Increase the growth of the new, enormously diverse citizen
media. Let's briefly look at those standards.
(1) The facts quickly dispose of the myth that media competition
has diminished.
Shawano, Wisconsin and Chicago in 1975 versus 2006-07 illustrate
this point.
If you review the Appendices that I have submitted, you will see
that competition has increased significantly and meaningfully in both
markets--just as it has everywhere in the country--whether they be
small markets or large markets.
Competition is growing, and there is no end in sight. What's not
growing is news.
Let's turn to Standards 2 and 3 to address that concern.
(2) What would happen to local news if the cross-ownership ban was
not in place?
Interestingly and uniquely, there is a 32-year record of what
happens when the ban is not present. Just look at the performance of
stations in the so-called ``grandfathered'' markets from the size of
Miles City, MT to Chicago.
My Appendices cite multiple studies, including some by the FCC
itself, that demonstrate that the only distinguishing feature of
broadcast stations owned by newspapers as compared to other stations is
that the cross-owned stations do more and better local news and public
affairs programming.\1\
---------------------------------------------------------------------------
\1\ In the FCC study done by Jeffrey Milyo, he found that cross-
owned television newscasts contained more minutes of news, more local
news, 30 percent more news coverage of state and local political
candidates, more time for candidates to speak for themselves and no
difference a partisan slant than any other stations.
Jeffrey Milyo, Hanna Family Scholar, Center for Applied Economics
University of Kansas School of Business and Associate Professor,
Department of Economics and Truman School of Public Affairs, University
of Missouri. FCC PUR 07000029: The Effects of Cross-Ownership on the
Local Content and Political Slant of Local Television News, June 13,
2007.
---------------------------------------------------------------------------
Isn't that the essence of the public interest?
And that's it, there are no other differentiators. The studies
confirm that the ban is an obstacle to the public having more local
news.
As part of this, have you ever asked yourself why only the largest
cities in this country have true all-news radio stations? Not
syndicated talk shows, I mean all-news, with local news and local
reporters.
The answer is that all-news stations are very expensive to operate
and can only be supported in a few large markets unless the cross-
ownership ban is removed.
If the ban is gone, small and middle American cities can tap the
local news which is the core product of local newspapers, and more all-
news and local news on radio will be the inevitable result.
And, don't count on Google or Yahoo! to cover the local school
board or city council. They have no journalists. They derive their news
from newspapers and other sources.
Next, let's look at standard number 3.
(3) Remove this ban if you want to enhance minority and news
organizations' ownership and voices.
Because of the ban, any non-news outlet can own a broadcast
station, but minority-owned newspapers cannot.
The minority press is struggling, and in the public interest I urge
you to enable them to compete, to provide news to their communities
when, where and how those citizens want it. This ban thwarts those
essential minority voices, and that is just plain wrong.
In the digital world, citizens--and especially the young--will use
every medium--newspapers, broadcast stations, cell phones . . . all of
it.
If you allow minority owned newspapers to own a station, that is
the only way they can compete, for competition in media from here on is
creating a portfolio of media outlets where the community's advertisers
can reach their customers, but, most important, where the minority
media can put on the air, for example, music, that the leaders and
parents in the Black community demanded at the FCC hearing I was at in
Chicago a few weeks ago.
It is music young people like, but it is not the poisonous kind
that those parents said was violent and hurting their community.
Then, the newspapers can tell the community that ``their station''
is available, and the parents and young people will have a local news
and culture outlet that they need.
Isn't that in the public interest?
(4) Even though it seems contradictory--protecting the public
interest requires that you ensure that large, quality news
organizations endure.
We need the large players because this is a huge (300 million
population) society. When the next 9/11 or Katrina or Amber Alert
happens, we need major media outlets. No blogger can adequately cover
these happenings.
Here are a few of the recent stories that would not have been
reported to you or to the public without the resources and commitment
of a major news organization:
Last week's disclosure about the chair of the Consumer
Product Safety Commission and her predecessor taking industry
paid-for trips.
The unsafe and deteriorating conditions at Walter Reed Army
Medical Center.
The revelation of secret CIA prisons in Eastern Europe.
Disclosures of the National Security Agency's secret
telephone call database and wiretapping program.
Rampant steroid abuse in major league baseball.
Safety violations in nuclear weapons manufacturing processes
and nuclear power plants.
Big is also not always bad, and when it comes to news and matters
of large scale or complexity, big is essential for an informed and
assured citizenry.
(5) Increase the growth of the new, enormously diverse citizen
media.
Larger, traditional news organizations also provide the fuel that
many citizen media need to thrive.
The Chicago Tribune, WGN radio and TV are mainstays in the radar
screen in my hometown that citizen media must have to learn, 24/7,
what's happening locally and around the world.\2\
---------------------------------------------------------------------------
\2\ I have my criticisms of the Tribune's news coverage in Chicago,
but there is no question that its hundreds of reporters at the Chicago
Tribune and the news staffs of WGN-TV which has an hour not a half hour
evening news show, and the news coverage of CLTV, Hoy, RedEye and WGN
radio--which is all news and local, not syndicated news and talk--
contributes far more news and information to this market than anyone
else.
If we are committed to providing tough, demanding, quality
journalism to an ``informed public'' and to enhancing the public
interest, localism and minority voices, there is no defensible
rationale to prohibit one newspaper from serving citizens with a
combined news staff on paper and over the air.
---------------------------------------------------------------------------
With that information, citizens can find stories, test and analyze
them, and use those reports as a jumping off place to develop their own
news and information.
In summary, I urge you to recognize the myths, embrace the facts
and allow the FCC to complete its 10-year examination of the cross-
ownership ban.
It has been on the books for over three decades without change.
Now, even as the world has changed radically and permanently--we must
move beyond 1975.
Removing the ban will go a long, long way toward fostering quality
journalism, minority voices, and localism and news in the public
interest.
It will also help ensure the viability and public service of local
broadcast stations. Thank you.
Appendix I
Competition since the 1975 Cross Ownership Ban
In 1975, the presence of UHF/TV and FM radio was small
compared to today.
There was no satellite or cable television, Internet, cell
phones or digital broadcast.
The number of terrestrial broadcast networks went from three
in 1975 (ABC, NBC, CBS) to today's ABC, NBC, CBS, FOX, PBS and
CW. And in February 2009, they will morph into myriad more with
the switch to digital.
Appendix II
Competition in Shawano, WI and Chicago 1975 vs. 2006/07
Today in Shawano: More Competition: Less News.
The census shows that the county grew from 32,650 in 1970 to
40,664 in 2000, the last census.
There is a cable system with numerous channels.
There are now four radio stations in that small town, but
their collective news staff has diminished to one person.
The Shawano Leader is still there, but its circulation is
down and its news staff of 6.5 full time and three part time
has diminished.
There is also an online, ``local'' newspaper that appears in
a Google search; it scrapes other media outlets.
Today in Chicago: Unbounded, Increasing Competition: Inadequate
Diverse or Citizen News.
In 1975, there was a tiny amount of TV derived in Chicago by
ADS (alternative delivery systems; not cable.) By 2006, cable
had penetrated 63 percent of the Chicago households and ADS
(primarily satellite) has another 20 percent. So, 83 percent of
the households had multiple TV channels coming in from cable or
ADS. (Source: Nielsen).
National (U.S.) online household penetration for dial-up and
high speed broadband in 1975, 2000 and 2007: There were no
online connections in 1975. In 2000, 51 percent of the
households had dial-up connections and 5 percent had high speed
broadband. By 2007, 27 percent had dialup connections while 58
percent had high speed broadband. (Source: Jupiter Research)
In Chicago Newspaper Designated Market (NDM) circulation
divided by NDM households (using a 7-day average) was 28
percent in 1975 versus 17 percent in 2006. (Source is Audit
Bureau of Circulation (ABC) and Publishers' Statements).
The 7 day average circulation for Chicago Tribune in 2000
was 668,000. In 2006, it was 617,000. (Source: Scarborough)
Revenues for the Chicago Tribune in 2000 were $882,013,000.
In 2006 they were $862,660,000, a decline of -2.2 percent for
the same period WGN revenues fell from $145,839,000 to
$135,480,000, a decline of -7.1 percent. (Note: The decline in
constant dollars would be more substantial.) (Source: Tribune
internal data)
The late night TV news ratings in Chicago in 1975 were 45.
By 2006 Nielsen reports it was 24. During that same period,
Tribune's WGN went from a 7 rating and 12 share in 1975 to a 5
rating and a 7 share in 2006. Note: Chicago is the 3rd largest
Designated Market Area as defined by Nielsen. (Source is
Nielsen data provides by Telerep).
In both Shawano and Chicago, cable plays a major role with
Charter Communications Cable in the former and Comcast and
others in the Windy City. The number of news competitors on
cable and satellite is on a growth curve with news networks
from Aljazeera English and Arabic, CNN, ESPN, Golf, BBC News,
Chinese, Japanese, etc., etc. The national average number of
cable channels per system is 223.\3\
---------------------------------------------------------------------------
\3\ In the Matter of Annual Assessment of the Status of Competition
in the Markets for Delivery of Video Programming, Eleventh Report, MB
DKT No. 04-227, FCC 05-13.
---------------------------------------------------------------------------
Appendix III
Empirical Studies Showing Cross-Owned Broadcast Stations Produce More
and Better Local News
Jeffrey Milyo, University of Kansas School of Business;
Department of Economics and Truman School of Public Affairs,
University of Missouri, The Effects of Cross-Ownership on the
Local Content and Political Slant of Local Television News,
August 2007.
Daniel Shiman, FCC, The Impact of Ownership Structure on
Television Stations' News and Public Affairs Programming,
August 2007.
Craig Stroup, FCC, Factors that Affect a Radio Station's
Propensity to Adopt a News Format, August 2007.
Project for Excellence in Journalism, Does Ownership Matter
in Local Television News: A Five-Year Study of Ownership and
Quality, 2003.
Thomas C. Spavins, et al., FCC, The Measurement of Local
Television News and Public Affairs Programs, 2002.
Appendix IV
Cross-Owned and Major Television Stations by Market
------------------------------------------------------------------------
DMA Rank and Name Cross-Owned Non Cross-Owned
------------------------------------------------------------------------
1 New York, NY WWOR, WYNY (NY Post) WABC, WCBS, WNBC
and WPIX (Newsday)
2 Los Angeles, CA KTLA (Los Angeles KABC, KCBS, KNBC, KTTV
Times)
3 Chicago, IL WGN (Chicago Tribune) WBBM, WFLD, WLS
6 Dallas, TX WFAA (Dallas Morning KDAF, KDFW, KTVT, KXAS
News)
9 Atlanta, GA WSB (Atlanta Journal WAGA, WGSL, WXIA
Constitution)
12 Tampa, FL WFLA (Tampa Tribune) WFTS, WTSP, WTVT
13 Phoenix, AZ KPNX (Arizona Republic) KNXV, KPHO, KSAZ
16 Miami, FL WSFL (Sun Sentinel) WFOR, WPLG, WSVN, and
WTVJ
28 Hartford, CT WTIC (Hartford Courant) WFSB, WTNH, WVIT
32 Columbus, OH WBNS (Columbus WCMH, WSYX, WTTE, and
Dispatch) WWHO
33 Cincinnati, OH WCPO (Cincinnati Post) WKRC, WLWT, WXIX
34 Milwaukee, WI WTMJ (Milwaukee Journal WDJT, WISN, WITI
Sentinel)
35 Salt Lake City, UT KSL (Deseret News) KSTU, KTVX, KUTV
58 Dayton, OH WHIO (Dayton Daily WDTN, WKEF, WRGT
News)
77 Spokane, WA KHQ (Spokesman-Review) KAYU, KREM, KXLY
80 Paducah, KY WPSD (Paducah Sun) KFVS, WSIL
88 South Bend, IN WSBT (South Bend WNDU, WSJV
Tribune)
89 Cedar Rapids, IA KCRG (Cedar Rapids KFXA, KGAN, KWWL
Gazette)
92 Tri-Cities, TN-VA WJHL (Bristol Herald WCYB, WEMT, WKPT
Courier)
93 Baton Rouge, LA WBRZ (Morning Advocate) WAFB
95 Waco-Temple-Bryan, KCEN (Temple Daily KWTX, KXXV
TX Telegram and Killeen
Herald)
103 Youngstown, OH WFMJ (Vindicator) WKBN, WYFX, WYTV
105 Myrtle Beach- WBTW (Morning News) WFXB, WPDE
Florence, SC
119 Fargo, ND WDAY (Forum) KVLY, KVRR, KXJB
128 Columbus, GA WRBL (Opelika-Auburn WTVM, WXTX
News)
156 Panama City, FL WMBB (Jackson County WJHG, WTVY
Floridian)
171 Quincy, IL WGEM (Quincy-Herald KHQA
Whig)
------------------------------------------------------------------------
Source: Federal Communications Commission.
Senator Smith. Mr. Chairman, may I ask for a point of
personal privilege?
Senator Dorgan. Yes.
Senator Smith. Mr. Chairman, I want my friend from
Washington, I want all of my colleagues, to know that I
support, entirely, the diversity requirements. That's why
Senator McCain and I have reintroduced legislation to achieve
that.
But I come from a very rural part of Oregon. I tend to see
the world through the eyes of my neighbors. And where I'm--come
from, radio stations go out of business all the time, because
they can't make it. Television stations out of Tri-Cities
occasionally change hands. Recently, the Wallowa Chieftan was
purchased by the newspaper in my town because it was in
desperate financial shape.
And so, to the professor's point, that is the prism in
which I made my comments. From the comments of people of rural
Oregon--I'm sure, rural Washington--I know I'm told by the
owners of the Oregonian, their circulation is shrinking
dramatically because of the pressure from the Internet and in
the digital age, that there are--there are big producers that
are probably making a lot of money. And that's why I support
diversity and would like to make sure we craft this in a way
that brings more Latinos, more African Americans, more Native
Americans into ownership. But in rural places of our country,
some of the things that might be considered don't help, they
really, really hurt. And that's where I'm at, and that was the
basis and the prism from which I made my comments.
Thank you, sir.
Senator Dorgan. Thank you, Senator Smith.
Let me make two points, and then I want to ask a couple of
questions, then I will turn to my colleagues.
First, some while ago, in one of our larger communities in
North Dakota, a Texas radio station owner hired a Salt Lake
City consultant to try to determine what a Fargo, North Dakota,
audience wanted. Strange, isn't it? Texas owner hires a Salt
Lake City consultant to evaluate the needs and wants of a local
audience. Number one.
Number two, yesterday in the newspaper in North Dakota, two
Fargo radio stations, both owned by different companies in
Texas, decided, under a lease-management arrangement, to
consolidate their evening newscasts. So, what for several
decades has always been competing newscasts will now, because
of two Texas companies separately owning the stations, reaching
a lease-management arrangement of some type, will now only be
one newscast. Once again, out-of-state ownership, reduction in
the news staff and the newscasts.
Let me ask this question. Mr. Winter first, then Mr.
Lavine.
Mr. Winter, Mr. Lavine says, and many others do, ``There
are more choices and more voices. What are you talking about?
More choices, more voices, the Internet. For God's sake, there
are all kinds of competition.''
You testified in a very interesting way, saying that in
your city, with 48 cable channels, 43 of them are owned by the
six large, dominant media enterprises. Is that more choices and
more voices, or is it more voices and one ventriloquist, or
several ventriloquists?
Mr. Winter. I don't--Senator, thank you for the question--I
don't see this as more choices. When you have more of different
products offered by the same editorial voice, it's the same
board room, the same board of directors, it's the same
shareholders that are profiting from their bundled package that
I described to you.
With regard to the Internet, I think it's interesting to
point out that most people get their news on the Internet from
the major media conglomerates that have news sites. MSNBC, CNN,
FOX News, these are where people get most of their news on the
Internet, by and large. And so, again, it is still the same
voice, same editorial control, and same decisions being made in
the same board rooms.
Senator Dorgan. I'm going to ask Mr. Blethen a question,
and then come to Mr. Lavine.
Mr. Blethen, Mr. Lavine said, as many do, that the major
newspapers are losing money or that, quote, ``newspapers are
losing money,'' generally--losing subscriptions. You're a
newspaper person. What is happening to the newspapers in our
country?
Mr. Blethen. Well, this is what I call ``back to the
future,'' back to 30 years ago, when we were single-digit
margin businesses. What I referred to earlier, over the last 30
years we've seen the rise of a financially driven investor in
newspapers and broadcast. And what's happened is, they have a
short-term investment mentality. And the degree to which you
hear the business is failing, what's failing is, their
investments have failed. Ultimately, the people who overpaid
and overpaid and finally the market that milked these high
margins--as I said earlier, you know, when I testified in this
committee 4 years ago, the industry was pulling down 50-percent
broadcast margins and 30-percent newspaper margins. Even today,
newspapers going through some unprecedented downturn and
classified advertising, which was temporary to begin with, are
pulling down 16 to 18 percent profit margins.
And the point, Senator Smith, on rural communities is a
very good one. My family operates papers in Augusta, Maine;
Waterville, Maine; Walla Walla, Washington; and Yakima,
Washington, about as rural and low demographic, for the most
part, as you can possibly get, save for all the wine people
that are now moving to Walla Walla. And I can tell you, we make
very good profit margins. We're losing revenue, we're
transforming into the new age of lower classified and Internet.
We make good margins. And in Yakima, which is a low demographic
farm community, we have a 40,000-circulation paper doing very
nicely, with three independent television affiliates and
several radio stations. We're all making money. And it's good
competition, it's good for the advertisers, it's good for the
communities.
Senator Dorgan. Mr. Blethen, thank you.
Mr. Lavine, as you might know from publicity from this
committee, there was a study that was done by the Federal
Communications Commission, among several others, that was not
disclosed to the American people or to this committee. A study
was done in 2004 by a couple of FCC researchers, concluding
that local ownership of television stations adds news content
to broadcasts, above that which is coming from foreign
ownership, out-of-State ownership. So, that was a study that
was done that concludes what one would expect to be the case,
and yet, it was withheld and only released by the FCC under
pressure from this committee.
Are you aware of that study? And do you think that study--
that study is obviously at odds with what you are telling the
Committee. How do you explain that?
Mr. Lavine. First of all, Senator, I'm not saying to the
Committee--I didn't address myself to the question of
ownership, I addressed just the cross-ownership ban. They are--
they are really separate issues. Can I try to answer your
question in two ways?
Senator Dorgan. Sure.
Mr. Lavine. I don't think anyone says that the industries
involved are losing money. That's not true. Here are the facts,
as I know them. What is happening to newspapers is that their
advertising, particularly in classified online, is plummeting.
If you look at what can be charged by those companies as they
move online to maintain the news staffs that they need to do
the job I think we all agree they should do, it's a fraction of
what they can charge now. And at no foreseeable time in the
future is the money that they can charge anywhere near equal to
what it takes to support the news and editorial staffs that we
all believe need to be there. It's simply that you're--the
steep downward trajectory. If you wish, I have spent, because
I'm a professor and I do that, part of the last few days
looking at two huge notebooks, which I would be happy to leave
before the Committee, that lay out a whole bunch of studies
that surround this point. It isn't loss, but it is downward
trajectory.
I think the other point is--and I just want to be real
clear about this----
Senator Dorgan. Well, would you respond to Mr. Blethen's
point of downward trajectory from 40- or 50-percent net down to
15-or--I mean, you know, downward trajectory----
Mr. Lavine. A group of the publicly traded newspaper
companies make 16 to 18 percent, rapidly falling downward.
There's another study, which--Frank and I are old friends--
which we both have worked with, that is done across public and
private companies, and the smaller the property, the more
rapidly into the single digits that falls, and, in some very
large cities--this is also a problem; I mean, I'm not telling
you anything out of school--the San Francisco Chronicle is
losing a million dollars a week. This is not a viable future
for that newspaper if that continues.
Can I add the news point? Because I think it undergirds the
economics.
To say that MSNBC is where people get news may or may not
be fine, talking about national news, but I don't think that's
what we're talking about. I think we're talking about local
news. And, Senator, with respect, I come from Duluth, so I live
up in the country that you come from and we both love. And I
remember, with enormous pain, what happened in Minot. And, I
must tell you, when that rail car started to leak and those
stations didn't go on the air and deal with it--I mean, beyond
being horrified--it seemed to me that is a sort of classic
example where, if a--one station in that market was owned by
the local newspaper, a news organization, it would have been on
the air, and it would have been available to the community. And
that's--we may disagree on that, but at least--I've seen more
examples of that over the last 30 years in the newspaper/
station-owned markets than not, because they are news
organizations.
Senator Dorgan. Mr. Lavine, I've exceeded my time. Let me
just observe, however, that, if those six stations had not been
owned by one company in Texas, instead had been owned by six
individual owners in Minot, I guarantee you they'd have tracked
an owner down. It needn't have been owned by the newspaper to
have had an opportunity to have some local content that night
during that tragedy.
I've exceeded my time, and I apologize to my colleagues for
doing that. Mr. Goodmon, if you could give me just the briefest
answer. Is it counterintuitive to suggest or imply that local
ownership would have less news? I mean, it seems to me that the
studies and other suggestions are, with respect to the----
Mr. Goodmon. All the----
Senator Dorgan.--radio----
Mr. Goodmon. All the FCC studies suggest that there is more
local news with local ownership. And, in fact, Senator, an FCC
study was just released that suggested that in markets in which
there is currently newspaper/television cross-ownership in that
market, there is less local news----
Senator Dorgan. That's local news----
Mr. Goodmon.--in the total market.
Senator Dorgan.--in total in the market.
Mr. Goodmon. Yes.
Senator Dorgan. I have exceeded my time. I apologize to my
colleagues.
Senator Inouye?
The Chairman. Mr. Nogales, we've heard the testimony of the
professor, who suggested that the ban of cross-ownership would
increase the possibility of minority media ownership. Do you
agree with that?
Mr. Nogales. Absolutely not. First of all, let's take Los
Angeles. Minorities cannot buy a property because it is so
expensive. The prices have been driven up by consolidation to
where a minority doesn't have the money to do that. And if they
have a newspaper and they buy if they have the money to buy a
radio station, you can be sure that that conglomerate will come
in and snap them up if there is any money to be made. So, do I
agree? Absolutely not. We have seen too many examples of that
not coming across. That's why the numbers of minorities buying
properties are so low. And the numbers speak for themselves. We
don't have to invent them, we don't have to speculate on them.
The numbers are there. They're very, very clear.
The Chairman. What is your solution to your problem?
Mr. Nogales. We've got to stop consolidation. We cannot
allow the FCC Chairman to gallop on in December and make new
ownership rules that are going to prohibit minority ownership.
You know, as I--all of you believe very much in the public
interest, our public interest. Over 33 percent of the U.S.
population are people of color. We're left out. We don't have a
voice, because we can't afford it, because the companies that
control media at this point are so large, and to allow them to
get larger and larger makes no sense whatsoever. It becomes a
club, a very small club that excludes too many people from it.
The Chairman. I thank you very much.
Senator Dorgan. Senator Cantwell?
Senator Cantwell. Thank you, Mr. Chairman.
Mr. Blethen, we've heard from Mr. Lavine this morning about
some studies, which I'm happy to look at, most of them
commissioned by the FCC, about the cross-ownership ban. Why do
you think it's so important that we maintain the current ban on
cross-ownership? What do you think is likely to happen if the
ban was lifted?
Mr. Blethen. Well, I think if the ban was lifted, what
you're going to have is--we've already seen a terrible
reduction in voices across America and in all of our
communities, irrespective of size, and we're going to see even
fewer voices. And, with it, we're going to see disinvestment,
further disinvestment in journalism and further disinvestment
in minority employment.
Listening to Mr. Nogales, I mean, one of the things--this
is beyond the Committee's purview, but if they took a look at
the minority employment in newspapers in the era of
consolidation in this decade, they will find that one of the
most egregious failures of my industry, and one of the most
embarrassing, is our failure in minority employment. So, we
can't even get it right on minority employment, let alone make
stations affordable and available to them. But I don't think
there is any question that cross-ownership would reduce
journalism, reduce employment, drive up ad rates, and take
voices out of communities, even small ones.
Senator Cantwell. And so, how do you think we answer these
questions about economics, or do you think there are studies
and analysis out there on the other side that also show that
the economics can work in these communities?
Mr. Blethen. Well, absolutely. I mean, I find--I only
really got involved with FCC issues this decade. And one of the
things that has just shocked me is the lack of credibility in
FCC studies, both their methodology, then how they interpret
them, and then how, when they find something that says
something they don't like, they hide it from the public. You
know, I think this committee needs to go beyond the FCC studies
and make sure that there is some credible input out there. And
they talk to people like me and like Mr. Goodmon who actually
run stations and run newspapers on a daily basis, and not
large, financially driven conglomerates who are really focused
on their financial return, in a global sense, not whether or
not the operations are still operating.
These are good businesses. We're going through immense
transformation, but we are going to--I have no doubt that
newspapers and broadcast stations can continue to make an
adequate profit to keep their business going and to invest in
local journalism. They cannot sustain the appetite of large
financially driven companies, though.
Senator Cantwell. And to the scalability issue--I'm sorry
my colleague Senator Smith left, because, you know, I do feel
bad that, in the last election cycle in Pendleton, he probably
had to watch a lot of my television ads coming out of the Tri-
Cities, and--
[Laughter.]
Senator Cantwell.--I'm sure that got old after a while.
But to this point about scalability and being able to
propose the notion that you have to have some cross-ownership
to reach that scalability, do you think that there are
statistics that probably show that there are ways--or do you
think we have to make any change in that?
Mr. Blethen. Well, I don't think you need to make any
change. I think you keep the rule in place and get more
aggressive on new rules, as I suggested in my testimony. At our
smallest paper in Walla Walla, Washington, which is only 14,000
circulation, there is a local free distribution classified that
has been there for 30 years, changes hands every 4 or 5 years.
There's a local radio station, it changes hands every 4 or 5
years. It's amazing how the marketplace will take care of these
things, even in a small market. And that's what's supposed to
happen.
Senator Cantwell. And I wanted to follow up, Mr. Winter, on
your point. Do you have a list of other complaints that have
been filed related to, you know, any objections on content that
have again been referred to the individual corporations, as
opposed to individual stations responding?
Mr. Winter. Senator, the letter that I have here--and I'm
happy to leave it here for the record--is, I think, the most
egregious example of a general manager taking no responsibility
whatsoever for what he or she put on the air in his or her
community, and abdicated entirely to the network. It is the
most egregious example I've ever seen.
I am only aware of other broadcasters who have told me
privately that they are forced to make those decisions, whether
they want them or not.
Senator Cantwell. Thank you.
And maybe that's something we could follow up in collecting
more data and information on.
I thank the Chair for this----
Senator Dorgan. Senator Cantwell----
Senator Cantwell.--hearing.
Senator Dorgan.--thank you very much.
Senator Snowe?
Senator Snowe. Yes, thank you.
First of all, Mr. Lavine, have you read the FCC's studies?
Mr. Lavine. Almost all of them, Senator.
Senator Snowe. Yes. And what's your analysis of them?
Mr. Lavine. Well, the study--again, I only looked hard at
one point, which was the cross-ownership ban. It seems to me
that the overwhelming preponderance of them came all to the
same conclusion, which was that more politics, public
information, public policy was covered in--on stations, radio
and television, owned by newspapers than not. And it makes
common sense, since these are news organizations, and so, they
do that.
I did not analyze the studies with reference to the other
questions that you're considering today, but I did look at----
Senator Snowe. On the issue of localism, for example?
Mr. Lavine. Well--yes. I mean, localism is certainly--local
news is, indeed, what I'm addressing. But I didn't look at the
broader issue of localism, since there are many other
mechanisms in the proposal that the Commission has raised, and
I--that was not the point of my testimony.
Senator Snowe. Well, you know--and I'd like to have Mr.
Blethen comment, as well--but the--there are dual challenges
here. One is, of course, that the FCC, you know, based on
speculation in the media that they're going to issue rules
regarding easing ownership, and that could come as early as
November 13, only have a 30-day comment period, which is an
impossibility; it's trying to mute the public's voice on this
serious question, a question on which the Congress has been
heard repeatedly and resoundingly repudiated the FCC's
direction in the past.
Second, there already have been questions about the
integrity of the report by a collective group of consumers that
submitted--and I don't know if you've had a chance to look at
their submission--but they were pretty critical of the FCC's
methodology, that it wasn't peer-reviewed, that it was
incoherent, that they were really pursuing a foreordained
conclusion. That's deeply troubling. And they say that, in
fact, if you use the FCC's own data, that it shows that
lessening newspaper/broadcasting cross-ownership rules results
in a net loss of the amount of local news; that, in fact, it's
a loss of an independent voice, as well as a decline in
marketwide news production. Would you agree with that? I mean,
they come to some very strong conclusions----
Mr. Lavine. Yes. Senator----
Senator Snowe.--first and foremost, and we--you know, and,
again, the analysis is disconcerting, and certainly it's
something that we should be examining. They have not really
separately considered the question of localism in conjunction
with this whole cross-ownership. That should be, given where we
are today. So, I think it's in all combinations. And the court
decision concluded the limits were not supported by the
research and the data that had been put forward by the FCC in
the past. That was the whole question, and it's a question that
we're confronting now.
Mr. Lavine. Senator, I have three quick answers.
One, the court did separate out the ban on cross-ownership
from the rest of what you've described, and said they didn't
see that that held up. So, the court, on its own, is saying
diversity and localism--the ban on cross-ownership is not--is
not thwarting that.
Two, we have 32 years and a whole lot of studies far
removed from the FCC that have been done in the academy and
elsewhere, looking at all the markets that have been cross-
owned and that were grandfathered in before the ban took place.
That's why I'm comfortable saying we don't need more time on
that. I understand what you're saying about the other larger
issues, and I understand the complexity of that.
I guess, if I had to make an argument, I would make it that
32 years, the courts saying it, and seeing that history, I feel
very comfortable saying we can set aside the FCC studies and
still reach the conclusion we're going to get more local news.
That's what we need.
Now, whether that applies to the other issues you're
talking about, I'm not prepared to say. I'm happy to look at
it, but I didn't come prepared to do that. And I do understand
it's a more complicated question.
Don't mix the two. This one has been sitting there for 10
years, we've had plenty of time to look at it. And, for the
small towns in just the kind of discussion we had, I think you
can--we can deal with it, and then move on to the larger
question in a timetable that you find wise.
Senator Snowe. Well, the court affirmed the FCC's decision
with respect to eliminating the newspaper/broadcast cross-
ownership rule, but it also concluded the specific limits
selected by the FCC were not supported by reasoned analysis.
So----
Mr. Blethen?
Mr. Blethen. Well, you know, it's like this--to me, it has
never really been rocket science. You've got the free press,
which is made up of broadcast and newspapers, and,
increasingly, the Internet. And it is essential to our
democracy, and it is essential to local communities. And we
have a lot of large companies now, and individuals, who have
been conglomerating and taking control of these markets, both
on a local basis and on a national basis. And as we get fewer
and fewer owners of both our national media and our local
media, it just doesn't make sense that that's good for
advertisers, for citizens, or for democracy.
You know, we can kick studies around--Consumers Union,
Committee of Concerned Journalists--I mean, there are a number
of organizations who have looked at the kind of massive
disinvestment that has gone on when you get absentee and
conglomerate owners. The first thing that happened was, about a
decade ago, as the rise of absentee newspaper owners took over,
was a huge disinvestment in statehouse coverage, which was
written about by Gene Roberts and Tom Kunkel at the University
of Maryland Press. And today what we have for statehouse
coverage across America is a shadow of what it used to be.
In Olympia, Washington, we used to have several radio
stations, several TV stations, and several newspapers down
there covering it, and we have more than most now, and it's
still a shadow of what it was.
And then, you look at the national level, and the argument
that big is better and I've never really seen big be better,
but there has been a massive disinvestment in foreign
reporting. You know, we are becoming illiterate on what's going
on in our own statehouses, as well as what's going on in other
countries. And this is by organizations where the news entities
are still profitable, not as profitable as they were 15 years
ago, but still profitable, and should continue to be
profitable, but don't make sense for financial investors or
people who have some other motive, in terms of controlling the
information we receive.
Senator Snowe. Thank you.
Thank you, Mr. Chairman.
Senator Dorgan. I don't know which of you were here first.
Senator Thune?
Senator Thune, you may proceed.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Thank you, Mr. Chairman. And thank you for
holding the hearing. It's a timely one, considering the
challenges that are facing us and the action that the FCC is
undertaking.
I think that the competitive, open, and diverse media is,
just, an important foundation of our democracy, and I think we
have a responsibility, on the Committee, to debate legislation
that protects that diversity and localism and media, and also
to monitor the activities of the FCC, which regulates all those
various media outlets. And I think that this debate is--as I
said, is a timely one, and one that those of us who represent
rural areas of the country, where we don't have, sometimes, as
many options for media outlets as they, perhaps, have in a more
populated area, it's a very important debate for us.
I'd like to have--just pose a couple of questions for some
of the panelists. And I thank you for being here and for your
input. That's very helpful.
Mr. Lavine, in your written testimony, you discuss the
potential for one-sided news and philosophical ideas when there
is a lack of diversity in media ownership. And I guess the
question is, how do you counter the argument when you're--that
argument--when you're promoting the concept of a larger, more
centralized approach to news outlets?
Mr. Lavine. Senator, I'm not--I guess I'm puzzled by the
``larger, more centralized news elements.'' I'm saying
something very specific. Most of the backbone of the 24/7 kind
of coverage that goes on comes from local newspapers. They look
at the world through the prism of being a news organization. It
seems to me, when--the facts simply are, we only have radio
with full-time real news, not syndicated, but local, in major
markets. We have almost no radio coverage in the country--not
totally, but darn near totally--in middle or smaller markets.
And what I'm saying is, it is certainly far better to have the
local newspaper join the one or none--no radio news people to
bring news to that market.
Number two, when I was a boy, if you owned a radio station
or a television station, it was, if you looked at the
economics, almost a license to steal. Didn't matter whether it
was the first or the eighth station, or the first or the third
television station.
These days, that's not true. The cost of producing news is
really, really high. It's not an accident that news doesn't
exist in middle and small markets, or even in some large
markets. It's too expensive.
So, all I'm arguing for is--we've got 32 years of watching
the markets, where a newspaper owns a radio or a television
station, and all of the studies, academic and FCC, say those
stations, on--as a group, have always done consistently better
coverage of real news. We need those voices.
Number two, for diversity, the world coming at us can be
summed up pretty quickly. Digital means there is fragmentation
of the market, more and more choice, and competition for
everybody's time. And all of us, especially the younger we
get--my generation reads; but the younger you get, that goes
away--all of us use a portfolio of media. It's not one, it's
many. And I look forward to the opportunity for a minority
newspaper to buy a struggling or on-the-ropes radio station,
and bring to it something no big company can bring, which is
the ability to say, ``This is the voice of the community.'' Say
it in the newspaper, say it on the station.
I was at the FCC hearing at Operation PUSH, about a month
ago, and I listened to a father berate the Commission for stuff
that was on the air, and say, ``Give us one place we can send
our kids.'' Boy, oh, boy, I have no doubt, if The Defender in
Chicago, a legendary, wonderful black newspaper, owned a small
radio station, quite quickly it would become the fulcrum of the
community, and that opportunity would exist. And this ban stops
that. And, oh, by the way, the station would have news on it,
because The Defender doesn't know how to do anything without
news, whether it's a small station in a general purpose, or a
small station for a minority community like that. That's all
I'm saying. That's a very targeted thing that could be done,
and could be done now, and we've had--even the courts said this
is not a problem.
The other issues are separate, and that's bigness and
complicated. And I probably will end up on your side on many of
those. But, on this issue, we need to act.
Senator Thune. All right. Well, I--if you--if the ban is
lifted--and, you know, it seem, to me at least, that creating
competition, more voices is the goal and the objective here,
and I just don't know how a local, small news outlet competes
against a company that's triple or quadruple its size.
Mr. Lavine. Because it has local news, because those big
companies don't cover local markets, and don't know how. Trust
me, The Defender or the Shawano Evening Leader are the big
player in that community, and they know how to cover everything
local and that is there, and they will aggregate an audience
around it, and they will be quite successful in doing it. We've
stopped them. We've stopped them. We can't do that. Because you
look in markets where they are crossed-owned, and there are
more news on those stations, and it's local news, it's not
something syndicated from far away.
Senator Thune. Mr. Winter, you had referenced in some of
your concerns about, you know, the vulgar content in a
television show and comments from the station's general
manager. The--I guess the question is, what type of control, if
any, do general managers at network affiliates have over
programming? And is there a mechanism whereby they could refuse
to show a program that's put forward by the network?
Mr. Winter. Well, the policies that we've heard from the
major networks is that the stations always have such a right to
preempt if they feel there is a violation of community decency
standards. Senator, a few years ago, actually, the same time we
received this letter from Kansas City, the station, we
conducted a survey, a phone survey. We called 100--actually, it
was about 98--television stations owned and operated by
networks that were around the country. And we asked the
questions to the programming director, when have you preempted
a program based on community decency standards? The answer was
shocking to us. One instance. On one occasion, one station had
ever decided to preempt a program based on community decency
standards out of the 100 or so that we polled. The reason is
simple: they take their orders from their corporate
headquarters, they get the same stock options as the folks back
at the headquarters, they are financially motivated to toe the
company line. There is, based on our analysis, very little
ability for them, or desire for them, to change a network
programming decision.
Senator Dorgan. Senator Thune, you have additional time, if
you wish.
I have to go to an energy and water panel right now, and
Senator Pryor has agreed to chair until it's completed. But I
just wanted to thank the witnesses, myself, for being here.
And, Mr. Goodmon, I think you wanted to respond to the last
point Mr. Lavine made, about cross-ownership producing more
local news, and I wish you would also respond, for the record,
on the issue Mr. Winter has raised, because, in your prior
testimony before this committee, you talked about a local
affiliate deciding not to air something as a result of local
standards. You have firsthand and fascinating experience with
that very issue.
So, Senator Thune, why don't you proceed. Let me apologize
for having to leave, but Senator Pryor will preside, and I very
much appreciate that.
Senator Thune. Thank you, Mr. Chairman.
And, Mr. Goodmon, you want to----
Mr. Goodmon. Right.
Senator Thune.--elaborate on this?
Mr. Goodmon. Just for a little reality check here, let me
tell you what I think--if the [FCC] Chairman gets his rule
passed, here's the deal. I could own 11 TV stations in North
Carolina, 30 radio stations, and the local newspaper in
Raleigh, Durham, Charlotte, Asheville, Greensboro, Winston-
Salem, and High Point. I mean, we're not talking about a little
radio station and a little newspaper in this--we're talking
about just an unbelievable extension of media consolidation.
And, by the way, I could own the cable systems in all those
places. So, getting this down to, how are we going to help the
little newspaper and the little radio station in a small market
is not what's going on here. What's going on here is, we have
some really good companies, now, really good, large companies--
Tribune, Belo, all these--all great, fine companies. They want
to own newspapers. They're not sitting there saying, ``We want
to do a better job of local news.'' They want to own those
newspapers. They're trying to own more stuff. That's why we're
having this hearing. That's why the chairman is doing it. So,
let's be honest about what--about what we're really talking
about here.
I think there is no way--it's a--there is a loss of a
voice. I really get upset when the newspaper people say, ``You
know, we'll do better news than TV people.'' Now, I don't know
what ``better news'' is. What we want is a whole lot of people
doing the news, you know, and we might like some of it. The
notion that a newspaper would say, ``Well, we'll do better news
than the TV people,'' I don't--no, I don't--come on. That's
just part of it. But we've got to be realistic about what we're
doing.
And please consider, this is--I didn't even want to talk
about what we should do, I wanted to talk about: this is not
the time to do it. We're in a huge change, a gigantic change.
It's not the time to do it.
And one other thing. This also sounds a little bit, to me,
like the newspapers are saying, ``We need a financial rescue.''
Right? ``We've got to own these TV stations, because we've got
these financial problems.''
Senator Thune. Well--and if----
Mr. Goodmon. Well, I've got it, too. My point is, my
audience is going down. Newspaper readership's going down. It's
all going down because of the Internet. And my industry and
their industry, we've got to adapt to the Internet. The notion
that ``to save each other, we have to own each other,'' doesn't
fit.
Senator Thune. Well, and that's--to Mr. Lavine's point,
that was the question or the--I guess, his argument was that
this is a matter of survival of----
Mr. Goodmon. No.
Senator Thune.--those that are out there.
Mr. Goodmon. Now, the other thing I'd point out is,
whenever I've looked at a financial statement--and I'm not that
kind of guy, now; I want to be a little careful, here--whenever
you look at that income statement, there is always a lot of
debt in there. And what you've got to understand is, a whole
lot of companies paid a whole of money--we're McClatchy market,
it's a great company--McClatchy bought the local newspaper in
our market, then they just bought Knight-Ridder and all these--
paid a lot of money for them. Now, they're working real hard to
figure out how to pay for that. So, in my mind, when you
include your debt service in your operating statement, you're
putting an unrealistic position as to whether you are
profitable or not. And if people pay too much for what they
buy, they pay too much for what they buy. That's not a--see
what I mean? I mean, normally that debt service is in there,
and I don't include that when I talk about whether it's a
profitable operation or not.
Senator Thune. Thank you, Mr. Chairman.
Thank you, all.
STATEMENT OF HON. MARK L. PRYOR,
U.S. SENATOR FROM ARKANSAS
Senator Pryor [presiding]. Thank you.
It looks like we're going to have a vote on the Senate
floor within the next 5 minutes, assuming the Senate stays on
schedule, which it always does, right?
[Laughter.]
Senator Pryor. So, I'm going to ask questions fairly
quickly. I have a few. But, at some point I'll need to break
off and get down to the floor and vote.
But, let me start, if I may, with a general question for
the entire panel. And that is, Commissioner Copps has advocated
five steps before loosening the existing media ownership rules.
One is to act on the minority ownership proposals. Two is to
complete the 2004 proceeding on broadcast localism. Three is to
put any proposed new ownership rules out for public comment
before a vote. Four is to abide by a process that is
transparent, open, and fair. And five is to address media
ownership rules comprehensively.
I'd like, if we could, just very quickly, go down the list,
here, of the panel, and just give me your thoughts on whether
you support what Commissioner Copps is suggesting, or whether
you think we ought to take a different route.
So, why don't we start with----
Mr. Nogales. We wholeheartedly support the Commissioner. It
is fair. It is comprehensive. It will allow all of us to
understand the facts of the situation, and particularly in
relation to minority media ownership. And, again, we're locked
out. And to rush to have a vote without a task force first
making a study as to what ownership is like out there, and
coming out with comprehensive recommendations as to how to
better those numbers, is silly.
Mr. Blethen. Absolutely. Although I think that's strictly
the minimum. I think Congress--as I said in my points at the
end of my prepared remarks, there are several things that
Congress should do to go beyond what Commissioner Copps and the
FCC are doing, in terms of new public policy, bold public
policy, which starts ensuring that we have localism and a
variety of voices throughout the country.
Mr. Winter. I agree with the Commissioner's plan. I think
it's precise. I think it will yield the answers that need to be
yielded before decisions are made. I support it.
Senator Pryor. Right.
Mr. Goodmon. Yes.
[Laughter.]
Mr. Lavine. I think you should separate cross-ownership,
after 10 years, eight hearings, 12 sets of responses, and 32
years of watching banned and cross-owned side by side, and get
that done. I think transparency and adequate time to do the
rest is a good idea.
Senator Pryor. Well, just for the record, I support what
Mr. Copps is proposing, as well.
Let me also ask, if I may--and, I'm sorry, is your name
pronounced ``Blethen''?
Mr. Blethen. Blethen, yes.
Senator Pryor. When you testified earlier, you talked about
one of the things you were surprised about is the FCC's studies
basically lack credibility. And I guess you called into
question the integrity of that process, when the FCC does
studies and the findings and--sounds like, you know, you feel
like they may be sort of preordained on what they're trying to
conclude, and if they don't work out to exactly what they want
to hear, then they are not interested in following those
recommendations.
But I would like to get--and Senator Snowe asked kind of a
related question, as well--but I would like to get everybody's
thought on these FCC studies, and just about that process, and,
are they credible? Do these studies have value? Is the FCC
following the advice or the recommendations found in the
studies, or are they just too biased, or whatever? So, again,
if we can just run down the panel very quickly on those.
Mr. Nogales. I should tell you that the studies are very,
very inaccurate, that the ones that have been brought out by
Free Press are much, much better, and they're recent, they have
the recent numbers on minority ownership, as well as ownership
as a whole. So, I wholeheartedly support those, and reject the
ones from the Federal Communications Commission, who they
themselves have said are not accurate.
Mr. Blethen. The same public-service law firm that dealt
with Chairman Powell's attempts to overturn the restrictions
in--a few years ago, recently, in a FOIA request, uncovered
some e-mails between the Chairman and staffers, basically with
staffers asking the Chairman who they should use for a study so
they can get the outcome that he wants. You know, it's just one
more piece in the lack of credibility that the FCC now has in
this arena.
I know, in my world, when that credibility is lacking, it
takes a long time to rebuild it, and I think this committee
probably needs to figure out, How do you go beyond that
committee to get some input and some studies? And there are
people out there that can do that stuff. Don't take the FCC off
the hook, just make sure they're getting peer-reviewed, they're
getting checks, they're getting balances, and they're being
held accountable for their studies.
Senator Pryor. Mr. Winter?
Mr. Winter. Senator, I honestly, sir, don't know the answer
to your question. I'm not qualified to answer it.
Mr. Goodmon. Right. I only know from what I'm--from what
I've read, so I'm not in a position to comment.
Senator Pryor. That's fair enough.
Mr. Lavine?
Mr. Lavine. I certainly haven't looked at the studies to
analyze them in that degree. But let me offer a suggestion, and
that is that, on those topics, there is a whole body of work
that goes beyond the FCC studies, and, in my world--and, you
know, the earlier comments notwithstanding--I don't--I'm a
professor, I'm no longer involved--doing television, as I once
did, or doing newspapers. I would urge you to take a look at
the body of work, because I'm not sure you need more studies, I
think you just need to do a metastudy--it's called a
metastudy--look at what's out there, and really see where they
come out. Much of this has been really ground that's been
heavily plowed. You will always come up with some differences
of opinion, but I'd do that first, before I'd say, ``Now we're
going to spend X more time going back over it,'' if we've got
it at hand, if we just do it smartly. Look at the total
research that's there.
Senator Pryor. Mr. Winter, I just have about 5 minutes here
before I have to leave and go vote, but let me ask you a
question, something you said in your testimony. You had an
observation about the negative impact that media consolidation
has had on the coarsening of television content. And I'd like
to go back to one of the points you made. You said, ``If a
television station and newspaper in a given market share
ownership, it follows that they will share editorial outlook on
policy. Even if they don't, how likely is it that a newspaper
would criticize a local broadcaster for anything, much less a
violation of community standards of decency, if both entities
are owned by the same company?''.
If you could, I'd like for you to elaborate on that point.
Mr. Winter. Yes, Senator. I think, just by way of example--
it was a recent conversation I had with a newspaper reporter
who works for a megaconglomerate that also owns a television
network. And he covers the Hollywood beat, as it were, the
entertainment industry. And I asked him, point blank, if his
editors had ever told him to sanitize a story that would
otherwise be harsh to his parent organization. And he said yes.
He said that he will not get instructions from the editor to
actually change a story that is, to make it untrue, but it will
certainly be watered down or killed entirely and not see print
if they feel that it is too harsh on its broadcast property.
That was one data point, Senator. And another is going back
to this Second Circuit ``fleeting profanity'' lawsuit. We don't
see news outlets talking about that the broadcasters now claim
the right to use the ``F'' word in front of children at any
time of the day. And I believe that the reason for doing that
is very clear, they don't want to call this out and let the
public be aware of it. And I believe that it is that type of
mentality, where you have, again, the same stock options, same
financial incentives, you lose the objectivity to criticize,
become a media watchdog for those in your own industry. I think
an independent media from the print side is vital to actually
run an oversight of broadcast television.
Senator Pryor. Well, this has been a great panel, and I
appreciate y'all's time and your preparation and your
commitment to be here today. And also, for the audience,
because there are a lot of people out there who are very
interested in this, I appreciate everyone attending, today.
Let me just say that I want to add my voice to those urging
Chairman Martin not to rush a vote on media ownership rules on
December 18. I think this is really the sense of the Congress,
and certainly the sense of the Senate and this committee, and I
would add my voice to those who say that he shouldn't do that.
Let me pause just for a minute here and ask the Committee--
we're going to keep the record open, here, for 2 weeks in order
for Senators to ask questions or if, during your testimony
there are documents that you want to provide to the Committee
staff, and have those made a part of the record, but, because
of our voting schedule and committee schedule and just end-of-
the-year rush here, there were a few Senators that couldn't
come that had hoped to, so we'll leave that open for 2 weeks.
If the staff contacts you with questions from Senators, we'd
love for you to respond to those as quickly as possible.
Senator Pryor. And so, with that, we'll adjourn the
meeting. And, again, thank you all for being here and
participating.
[Whereupon, at 11:55 a.m., the hearing was adjourned.]
A P P E N D I X
Prepared Statement of the National Association of Broadcasters
The National Association of Broadcasters (NAB) respectfully submits
this statement for the record in the Commerce Committee's November 8,
2007, hearing on Localism, Diversity and Media Ownership. NAB is a
trade association that advocates on behalf of more than 8,300 free,
local radio and television stations and also broadcast networks before
Congress, the Federal Communications Commission and the Courts. Radio
and television broadcasters provide a free, over-the-air service that
reaches virtually every household in America, keeping local
communities--and your constituents--informed and connected. Our members
serve listeners and viewers throughout the country with entertainment
and informational programming, including news and public affairs and
vital emergency information.
NAB believes that localism is best sustained by permitting
broadcasters to compete effectively in the digital multichannel
marketplace. The real threat today to locally-oriented services,
including costly services such as local news, is not the joint
ownership of broadcast stations, but the stations' inability to
maintain their economic vibrancy in the face of multichannel and other
competitors that are not constrained by restrictions on local ownership
structure. Only competitively viable broadcast stations supported by
adequate advertising revenues can serve the public interest effectively
and provide a significant local presence. Broadcasters are not calling
for an end to all ownership regulation, but for the modernization of
out-of-date restrictions that do not reflect current competitive
realities in the Internet age. Reasonable reform to outmoded ownership
restrictions will enhance the ability of local stations to serve their
diverse audiences and local communities.
Creating an Uncompetitive and Undercapitalized Broadcast Industry
Through Maintenance of Out-of-Date Restrictions on Media
Ownership Will Not Serve the Public Interest
Some parties in the media ownership debate continue to argue that
the broadcast ownership rules should not be modernized in any respect.
Indeed, a few contend that restrictions on local broadcasters should be
increased. However, to support such views, one must believe that the
media marketplace has not changed over the past several decades or that
the media marketplace is less competitive and diverse than before the
development of digital technology, numerous multichannel video and
audio services, and the Internet. Such a position is clearly untenable.
The Federal Communications Commission (FCC or Commission)
originally adopted its local broadcast ownership restrictions decades
ago in a very different media environment. In fact, the FCC first
implemented local ownership restrictions starting with radio in 1938.
The ``newest'' local ownership rule--the newspaper/broadcast cross-
ownership ban--was adopted in 1975 and has never been updated.
Moreover, these restrictions on local broadcasters do not apply to any
other industry, even those as highly concentrated as cable and
satellite. Broadcasters believe that these decades-old rules should be
brought up-to-date to reflect the dramatic technological and
marketplace developments that have occurred over the past 30 years, and
to level the playing field so that local stations can compete against
other outlets, including large cable and satellite companies.
Beyond ignoring all the changes that have occurred in the media
marketplace in recent decades, those calling for no change to, or for
increases in, media ownership restrictions also ignore the state of the
broadcast industry in the early 1990s before some of the ownership
restrictions were reformed to permit more economically viable ownership
structures. In 1992, for example, the Commission found that, due to
``market fragmentation,'' many in the radio industry were
``experiencing serious economic stress.'' \1\ Specifically, stations
were experiencing ``sharp decrease[s]'' in operating profits and
margins. FCC Radio Order, 7 FCC Rcd at 2759. By the early 1990s, ``more
than half of all stations'' were losing money (especially smaller
stations), and ``almost 300 radio stations'' had gone silent. Id. at
2760. Given that the radio industry's ability ``to function in the
`public interest, convenience and necessity' is fundamentally premised
on its economic viability,'' the Commission concluded that ``radio's
ability to serve the public interest'' had become ``substantially
threatened.'' Id. Accordingly, the Commission believed that it was
``time to allow the radio industry to adapt'' to the modern information
marketplace, ``free of artificial constraints that prevent valuable
efficiencies from being realized.'' Id.
Motivated by such concerns, Congress in the 1996 Telecommunications
Act acted to ``preserve and to promote the competitiveness of over-the-
air broadcast stations.'' \2\ Congress found that ``significant
changes'' in the ``audio and video marketplace'' called for a
``substantial reform of Congressional and Commission oversight of the
way the broadcasting industry develops and competes.'' House Report at
54-55. Congress specifically noted the ``explosion of video
distribution technologies and subscription-based programming sources,''
and stated its intent to ensure ``the industry's ability to compete
effectively'' and to ``remain a vital element in the video market.''
Id. at 55.
NAB respectfully submits that the Committee should not forget these
important lessons of the past. Arguments that the broadcast-only local
ownership restrictions should not be reformed are based on a refusal to
recognize all the factors that have transformed today's media
marketplace, including the development and spread of new technologies;
growth in competition for viewers and listeners among greater numbers
and different types of outlets and providers; changing consumer tastes,
especially among younger viewers and listeners; and dramatic changes in
the advertising marketplace, which affect free, over-the-air broadcast
stations more than subscription-based media. Policies turning back the
regulatory clock would create a fragmented, undercapitalized broadcast
industry and place broadcasters at an even greater competitive
disadvantage against multichannel and other information/entertainment
providers and outlets. As the FCC recognized in its 1992 Radio Order,
only competitively viable broadcast stations sustained by adequate
advertising revenues can serve the public interest effectively, provide
a significant presence in local communities, and offer the valuable
programming and services that local viewers and listeners want and
expect.
Despite the claims by some opposing any modernization of the
broadcast ownership restrictions, NAB also observes that the FCC is not
rushing to judgment in its current statutorily-required review of the
ownership rules.\3\ The Commission began its reexamination of the
newspaper/broadcast cross-ownership ban in 1996 with a notice of
inquiry on newspaper/radio cross-ownership, and commenced the still-
pending review of the newspaper/broadcast prohibition in 2001. The
Commission also commenced a review of radio ownership in 2001. The
Commission's review and revision of the television duopoly and radio/
television cross-ownership rules in the 1990s resulted in a 2002 court
appeal finding the revised duopoly rule to be arbitrary and capricious,
and sending the FCC's decision back to the agency for further
consideration. See Sinclair Broadcast Group, Inc. v. FCC, 284 F.3d 148
(D.C. Cir. 2002). This remand remains pending, with the arbitrary and
capricious duopoly rule still in effect. In addition, the Commission
reexamined the local broadcast ownership rules in its statutorily-
required 1998, 2000 and 2002 biennial reviews (the last of which
remains pending at the FCC after an appeal and decision by the Third
Circuit Court of Appeals remanding the agency's decision for further
consideration). See Prometheus Radio Project v. FCC, 373 F.3d 372 (3rd
Cir. 2004). Given the number of years that the Commission has been
considering reform of the local broadcast ownership restrictions, and
the voluminous empirical and anecdotal evidence that has been submitted
by those urging reform of these rules, the opponents of reform have no
basis for their claims that the Commission is somehow rushing to
judgment or that another decade of delay is necessary.
The Existing Local Ownership Restrictions Are Not Needed to Prevent
Broadcasters from Exercising Market Power in Today's
Multichannel Marketplace
In a multichannel environment dominated by consolidated cable and
satellite system operators, local broadcast stations are clearly unable
to obtain and exercise any undue market power. For this reason, the
traditional competition rationale for maintaining a regulatory regime
applicable only to local broadcasters and not their competitors is not
a proper basis for keeping the current rules. Indeed, the primary
competition-related concern in today's digital, multichannel
marketplace is the continued ability of local broadcasters to compete
effectively and to offer the free, over-the-air entertainment and
informational programming upon which Americans rely. Due to
technological advancements, the growth of multichannel video and audio
outlets and the Internet, and an expansion in the number of broadcast
outlets, an FCC report concluded that, even 5 years, traditional
broadcasters were struggling to maintain their audience and advertising
shares ``in a sea of competition.'' \4\ This competition has only
intensified in the past 5 years.
Specifically, NAB has documented in detail the audience
fragmentation and increasing competition for listeners, viewers and
advertising revenue experienced by broadcast stations, as the result of
new entry by cable television, satellite television and radio, numerous
Internet video and audio applications, and mobile devices such as iPods
and other Mp3 players. For example, in the first 3 months of 2007,
Internet advertising set new records by taking in $4.9 billion, a 26
percent increase over the previous year.\5\ Meanwhile, advertisers are
expected to spend 5 percent less on local and national spot advertising
in 2007 than they did last year.\6\ U.S. Internet advertising spending
is now predicted to overtake radio advertising in 2007.\7\ Cable's
share of local television advertising has also grown substantially,
with cable local advertising revenues increasing 12.2 percent from 2003
to 2004 and 12.0 percent from 2004 to 2005.\8\ Local cable system
advertising revenue experienced compound annual growth of 10 percent
from 1999-2004, with local television station revenue experiencing only
2 percent compound growth in those same years.\9\ In light of this
undisputed evidence about enhanced competition in the advertising
market, the local ownership rules should be structured so that
traditional broadcasters and newer programming distributors--which
clearly compete fiercely for advertising revenue--can all compete on an
equitable playing field.
A more level regulatory playing field is particularly urgent, given
that local broadcasters' most prominent competitors enjoy dual revenue
streams of both subscriber fees and advertising revenues. Broadcasters,
of course, are almost solely dependent on advertising, and local
stations today must struggle to maintain needed revenues in a vastly
more competitive advertising market. Any realistic assessment of
today's media marketplace leads to the conclusion that competition
considerations dictate change in the broadcast ownership rules.\10\
Consumers' Interests in Diversity Are Unquestionably Being Fulfilled
Nationally and in Local Markets
The existing broadcast-only local ownership restrictions are not
necessary to maintain diversity in today's media marketplace. The
proliferation of broadcast outlets and the rise of new multichannel
video and audio programming distributors and the Internet have produced
an exponential increase in programming and service choices available to
viewers and listeners. This proliferation has been documented by
numerous surveys of the numbers of media outlets and owners in local
markets.\11\ An FCC study of selected radio markets from 1960 to 2000
showed an increase in the number of outlets of almost 200 percent and
an average increase in the number of owners of 140 percent over the 40-
year period.\12\ Empirical studies have also shown that consumers
routinely access many additional ``out-of-market'' outlets, thereby
adding to the diversity of entertainment and information sources widely
accessible to viewers and listeners in local communities.\13\ The
public's interest in receiving diverse content is therefore being met
both nationally and on a market basis.
Numerous studies, including those by independent parties, have
confirmed that the post-1996 changes within local broadcast markets,
especially among radio stations, have enhanced the diversity of
programming offered by local stations. Indeed, independent studies have
concluded that ``increased concentration'' in radio markets has
``caused an increase in available programming variety.'' \14\ A 2007
study commissioned by the FCC concluded that ``consolidation of radio
ownership does not diminish the diversity of local format offerings.''
Indeed, ``[i]f anything, more concentrated markets have less pile-up of
stations on individual format categories, and large national radio
owners offer more formats and less pile-up.'' Station Ownership and
Programming in Radio at 44.
A 2006 study by BIA Financial Network also showed that radio
stations are providing a wide range of programming targeted for diverse
audiences, including minority groups and groups with niche tastes and
interests. For example, between 2000-2006, the number of Spanish-
language radio stations increased by 45.5 percent; as a result, over
half (50.4 percent) of the Hispanic population in Arbitron metro areas
receive over-the-air 10 or more Spanish-language radio stations, with
more than three-quarters (79.5 percent) receiving six or more of these
stations. The number of news/talk stations grew by 20.6 percent between
2000-2006 so that more than half (55.5 percent) of the population in
Arbitron metros receive at least six news/talk radio stations and 70.8
percent have over-the-air access to at least four such stations.\15\
Given the diversity benefits stemming from joint ownership of radio
stations, and the lack of any competitive harm from such ownership,
there is no basis for cutting back on the permitted levels of common
ownership in local radio markets, but in fact the continued relaxation
of these limitations should be considered.
Beyond increasing diversity of content, numerous other studies
indicate that the joint ownership of media outlets in local markets
does not inhibit the expression of diverse viewpoints by the commonly
owned outlets. For instance, two studies examining the diversity of
information and viewpoints expressed by commonly owned newspaper/
broadcast combinations regarding the 2000 Presidential campaign
concluded that commonly owned outlets did not speak with a single voice
about important political matters.\16\ One of the new studies
commissioned by the FCC examined the partisan slant of television news
coverage, finding that there is no difference between newspaper cross-
owned television stations and other major network-affiliated stations
in the same market.\17\ In fact, the most recent research casts
considerable doubt on the long-assumed (but never proven) link between
ownership and viewpoint and shows instead a link between consumer
preferences and the viewpoint or slant of media outlets, whether print
or broadcast. For instance, a 2006 academic study of newspaper slant
found that ``ownership does not account for any of the variation in
measured slant,'' but concluded that the political orientation of
newspapers is driven more by the ideology of the targeted market than
by ownership and that ``newspapers' actual slant is close to the
profit-maximizing level.'' \18\ Similarly, an FCC-commissioned 2007
study examining the political slant of television stations found that
the partisan slant of local television news was associated with average
partisan voting preferences in the local market, rather than ownership
patterns. Milyo Television News Study at 23-24. In other words, the
most recent research has found that any media slant is in direct
response to consumer preferences--not the ideology of any particular
owner.
The ability of consumers to obtain diverse content and viewpoints
is only enhanced by the growing level of substitutability between media
for both entertainment and informational purposes. Studies conducted
for the Commission and other surveys on media usage reveal considerable
substitutability between media for various uses. Indeed, the recent
studies showed that multichannel outlets and the Internet compete
with--and substitute for--the use of traditional media including
broadcast and newspapers for both entertainment and information,
especially among younger consumers. For example, Arbitron/Edison Media
Research recently found that the Internet is now regarded by consumers
as the second ``most essential'' media in American life, and
researchers predict that ``it is likely that the Internet will soon''
move into ``first place.'' \19\ One of the recent FCC-commissioned
studies confirms that the Internet is gaining as a competitor to
traditional media outlets.\20\ Respondents to the Nielsen Media
Research survey in FCC Study I reported greater weekly Internet usage
(12.8 hours) than usage of both broadcast television (10.4 hours) and
radio (6.2 hours). FCC Study I at 4, 30, 72. When compared to similar
survey results from 2002, this new Nielsen survey also strongly
indicates that the extent to which consumers are substituting the
Internet for television and radio is increasing over time. In just the
5 years between the two Nielsen surveys, the percentage that responded
that they did not use the Internet fell sharply from 31.3 percent to
only 5.4 percent.\21\ These Nielsen surveys also showed that other
outlets, particularly cable television, are important sources of news
and information, including local, national and international.
Opponents of reform, however, continue to insist that the effect of
the Internet in the media marketplace generally, and especially as a
source of news, is minor. This position is contrary to reality.
Obtaining news and information (along with sending or reading e-mail)
are the most popular on-line activities. As of early 2007, 72 percent
of all Internet users (and 79 percent of home broadband users) report
that they ``get news'' online, with 37 percent of all Internet users
(and 45 percent of home broadband users) reporting that they got news
``yesterday'' online.\22\ Online video, including news videos, now
reach a mainstream audience, with 57 percent of online adults using the
Internet to watch or download video and nearly one-fifth (19 percent)
doing so on a ``typical day.'' \23\ More than three in four (76
percent) young adult Internet users (ages 18-29) report online
consumption of video, with 31 percent watching or downloading some type
of video on a typical day. News content is the most popular type of
online video overall and with every age group, except for the youngest.
Overall, 37 percent of adult Internet users report watching news
videos. Pew Online Video Report at i-ii.
Thirty-one percent of all Americans (and 46 percent of all Internet
users) used the Internet during the 2006 campaign to obtain political
news and information and discuss the races through e-mail.\24\ Fifteen
percent of all American adults reported that the Internet was their
``primary source for campaign news'' during the 2006 mid-term
elections, up from only 7 percent in the 2002 mid-term elections.
Broadband users under age 36 said that the Internet was a ``more
important political news source than newspapers.'' Pew 2006 Election
Report at i-ii. Moreover, the Internet is already proving more integral
than ever to political candidates in the upcoming 2008 elections.
Candidates are spending large sums on Internet advertising and relying
heavily on the Internet to communicate with supporters, while potential
voters looking more to the Internet to find political information,
either directly from candidates or from blogs and other online news
sources.\25\ Clearly, the number of Americans relying on most
traditional media, such as newspapers, magazines and television, for
political/election news has declined significantly since the 1990s as
on-line sources have become much more important. See id. at i.
In sum, continued claims about the miniscule impact of the Internet
in the media marketplace cannot be credited, and certainly cannot be
used to justify retaining the current broadcast ownership rules
unchanged. Given the growth of multichannel video and audio outlets and
consumers' ability to access content as ``diverse as human thought''
via the Internet,\26\ claims that, for example, allowing a television
broadcaster to own two stations in a local market could somehow
substantially reduce the diversity of ideas and views available to
consumers is not sustainable.
Localism Is Best Preserved by Permitting Broadcasters to Compete
Effectively in the Digital Multichannel Marketplace
As shown by NAB in the Commission's pending localism proceeding,
local stations provide a wealth of local news and public affairs
programming, political information, emergency information, other
locally produced and responsive programming, and additional, unique
community service (including billions of dollars of free air time for
local and national public service announcements and billions of dollars
in monies raised for charities, other local organizations and causes,
and needy individuals).\27\ But given the relentless competition for
audience and advertising shares from the vast array of other media
outlets, the real threat today to the extensive locally-oriented
service offered by television and radio broadcasters is not the group
ownership of stations. Rather, it is the challenge stations face in
maintaining their economic viability in a market dominated by
consolidated multichannel providers and other competitors. To maintain
a system of competitively healthy commercial broadcast stations
offering free, over-the-air service to local communities, stations must
be allowed to form efficient and financially sustainable ownership
structures.
Studies almost too numerous to recount have shown that local
service is enhanced if local broadcasters are able to jointly own media
properties in the same market. For example, several of the recent FCC-
commissioned studies concluded that television stations owned by in-
market newspapers aired more news programming overall, more local news
programming specifically, and more political news coverage.\28\ Similar
empirical evidence from earlier studies \29\ persuaded the Third
Circuit Court of Appeals to agree with the Commission's determination
in its 2002 review of the broadcast ownership rules that the blanket
ban on newspaper/broadcast cross-ownership no longer served the public
interest. Prometheus, 373 F.3d at 398. The Court concluded that
``newspaper/broadcast combinations can promote localism,'' and agreed
with the Commission that a ``blanket prohibition on newspaper/broadcast
combinations is not necessary to protect diversity.'' Id. at 398-99.
NAB fully agrees with these earlier determinations, and urges the FCC
in its pending ownership review to reaffirm its repeal of the complete
ban on newspaper cross-ownership.
One of the recent FCC studies similarly concluded that the co-
ownership of two television stations in the same market ``has a large,
positive, statistically significant impact on the quantity of news
programming.'' Shiman Ownership Structure Study at I-21. ``For each
additional co-owned station within the market,'' this study found ``an
increase in the amount of news minutes by 24 per day about a 15 percent
increase.'' Id. A November 2007 study by Economists Incorporated found
that same-market television stations that are commonly owned or
operated are significantly more likely to carry local news and public
affairs programming than other television stations, even after
controlling for other factors.\30\ Two earlier studies by BIA Financial
Network demonstrated that the acquired stations in duopolies experience
increases in their local audience share and revenue share following
their acquisition.\31\ As this evidence makes clear, the formation of a
duopoly allows the acquired station to offer programming more
attractive to viewers, thereby better serving their local audiences.
Interestingly, recent research from certain opponents of ownership
reform indicates that television ``duopolies may lead to more local
news and public affairs.'' \32\ Although these parties generally
continue to insist that, ``[a]s market concentration increases, local
news and public affairs decreases,'' they also conclude that
``duopolies appear to work in the opposite direction.'' Comments of
Consumers Union, et al., at 98. Thus, the research of those opposing
reform of the local ownership rules provide further evidence of the
public interest and localism benefits that flow from the common
ownership of television stations in local markets. Indeed, even before
these recent studies, the Third Circuit Court of Appeals agreed with
the Commission that media other than broadcast television contributed
to viewpoint diversity in local markets, and agreed that common
ownership of television stations ``can improve local programming.''
Prometheus, 373 F.3d at 414-15.
Given these established public interest benefits flowing from
television duopolies, NAB supports allowing duopolies more freely in
markets of all sizes, especially in smaller ones where the need for
television stations to form more competitively viable ownership
structures in the most acute.\33\ As the FCC has previously recognized,
``the ability of local stations to compete successfully'' in the video
marketplace has been ``meaningfully (and negatively) affected in
midsized and smaller markets,'' primarily because ``small market
stations are competing for disproportionately smaller revenues than
stations in large markets.'' \34\ Reform of the television duopoly rule
would thus enable local television stations, especially those in medium
and small markets, to compete more effectively and thus ultimately to
better serve their local communities.
Finally, NAB observes that, despite exaggerated claims by those
opposing any modernization of the local ownership restrictions, local
owners and small owners have not disappeared from the broadcast
industry. According to the Commission, the number of locally owned
television stations increased approximately 3 percent from 2002-
2005.\35\ In 2005, 6,498 radio stations (out of 13,590) were locally
owned. FCC Media Robustness Study at 11. As of 2006, nearly 37 percent
of all radio stations in Arbitron markets were either standalone (i.e.,
the only station owned within its market by its station owner) or part
of a duopoly (i.e., part of a two station group within that local
market).\36\ Nationwide, there were, as of 2005, 4,412 unique radio
station owners and 480 unique television station owners. FCC Media
Robustness Study at 11. These figures do not even include the
additional owners of thousands of low power television and low power FM
stations. Given these large numbers of separate owners, it is hardly
surprising that radio and television station ownership is less
concentrated than other media sectors and less concentrated than other
leading industries.\37\
NAB Supports Numerous Initiatives to Increase Minority and Female
Participation in the Broadcast Industry
Broadcasters have regularly supported programs that promote
minority and female participation in the media business. Through our
partnerships with the National Association of Broadcasters Education
Foundation (NABEF) and Broadcast Education Association, NAB has helped
create a comprehensive educational structure that has brought hundreds
of new participants, from all backgrounds, into the broadcast industry.
NABEF, for instance, conducts seminars and programs that nurture
participants at every level of career development--from entry-level
media sales institutes,\38\ to managerial-level professional fellowship
programs at major universities, to executive-level Broadcast Leadership
Training (BLT) for those who aspire to own stations. To date, more than
15 percent of BLT graduates have gone on to acquire stations, and many
others are in various stages of station acquisition.
As NAB has frequently explained, the public interest is best served
by policies designed to encourage minority and female participation in
a competitively vibrant broadcast industry. Creating a fragmented,
undercapitalized and uncompetitive broadcast industry via undue
restrictions on broadcast ownership would not represent an effective
means of promoting minority and female ownership.\39\ Instead, Congress
and the Commission should look for solutions promoting the long-term
viability of women and minority entrants into broadcasting. To that
end, NAB strongly supports policies that would help ameliorate the lack
of access to capital that everyone agrees inhibits small and minority-
and female-owned businesses from entry into the broadcasting and other
communications-related industries. NAB has long supported the
reinstatement of a tax incentive program as the most effective way to
promote diversity of ownership in broadcasting. NAB also supports a
range of other proposals made by the Minority Media and
Telecommunications Council to promote the entry and participation of
minorities and women in broadcasting.\40\ The best way to reach this
goal is through public/private partnerships and market-based stimulants
that will promote entry and the long-term viability of female and
minority entrants in a competitively healthy broadcast industry.
NAB further observes that the assumption that permitting the common
ownership of broadcast stations automatically has a deleterious effect
on minority participation in the broadcast industry is questionable.
One study purporting to find that the very limited relaxation of the
duopoly rule in 1999 had a negative impact on minority and female
ownership of television stations \41\ was found to be ``fatally
flawed'' by a peer reviewer of that study.\42\ Other parties have also
criticized this duopoly study for its ``non-transparent, biased
methodology'' and its ``unsupported conclusions and biased
statements.'' \43\ The data provided by some parties claiming that
increased common ownership ``unambiguously'' leads to reduced minority/
female ownership does not support their claim. For instance, according
to data assembled by Consumers Union, et al., members of minority
groups owned a greater number of television stations in 2006 than they
did before the FCC modestly relaxed the television duopoly rule in
1999.\44\ Earlier studies found that ``minority groups increased their
radio ownership'' after 1996.\45\
Thus, any data purporting to link common ownership with a decline
in minority and female ownership must be carefully evaluated. Rather
than refusing to modernize the local broadcast ownership rules due to
questionable and unproven assumptions about such a link, NAB urges
Congress and the FCC to implement policies that will ensure a
financially viable radio and television industry, taking into account
ever-increasing competition from a myriad of new sources. Initiatives
to promote the greater participation of women and minorities in
broadcasting--which, as explained above, NAB strongly supports--would
be moot in an environment where radio and television broadcasters are
held back from effectively competing in today's digital media
marketplace.
Conclusion
Broadcasters are not calling for an end to all ownership
regulation, but for the modernization of out-of-date restrictions that
do not reflect current competitive realities in the Internet age.
Reasonable reform to outmoded limitations will enable free, over-the-
air broadcasters to compete more effectively against multichannel video
and audio operators and Internet-based media providers, many of which
earn subscription fees yet also compete against broadcasters for vital
advertising revenues unencumbered by local ownership restrictions. As
the FCC has previously recognized, only competitively viable broadcast
stations supported by adequate advertising revenues can serve the
public interest effectively, provide a significant presence in local
communities, and offer costly local services such as local news. Above
all, broadcasters want to be able to continue to serve their local
communities and audiences effectively. Reform of broadcast-only local
ownership limitations can help local stations do just that.
Endnotes
\1\ Revision of Radio Rules and Policies, Report and Order, 7 FCC
Rcd 2755, 2756 (1992) (FCC Radio Order).
\2\ H.R. Rep. No. 204, 104th Cong., 2d Sess. at 48 (1995) (House
Report).
\3\ Section 202(h) of the Telecommunications Act of 1996 (1996
Act), as amended, requires the FCC to review its broadcast ownership
rules every 4 years and determine whether those rules remain
``necessary in the public interest as the result of competition.'' Pub.
L. No. 104-104 202(h), 110 Stat. 56 (1996), as amended by
Consolidated Appropriations Act, 2004, Pub. L. No. 108-199, 629, 118
Stat. 3 (2004).
\4\ Jonathan Levy, Marcelino Ford-Livene, Anne Levine, OPP Working
Paper Series #37, Broadcast Television: Survivor in a Sea of
Competition (Sept. 2002).
\5\ Internet ads hit another milestone, Chicago Tribune, June 7,
2007.
\6\ Jack Myers Media Business Report, 2007 Advertising and
Marketing Communications Forecast, Nov. 1, 2006.
\7\ Louis Hau, Web Ad Spending To Eclipse Radio In 2007,
forbes.com, Aug. 29, 2007.
\8\ See Annual Assessment of the Status of Competition in the
Market for the Delivery of Video Programming, Twelfth Annual Report, 21
FCC Rcd 2503, Table 4 (2006). This report also documented the continued
growth in viewing shares of cable/satellite television, at the expense
of broadcast television.
\9\ Local Television Market Revenue Statistics, Attachment F to NAB
Comments in MB Docket No. 06- 121 (filed Oct. 23, 2006).
\10\ Claims by opponents of reform that post-1996 ownership changes
in the radio industry have resulted in competitive harm are unfounded.
A recent study commissioned by the FCC concluded that ``consolidation
in local radio has no statistically-significant effect on advertising
prices'' and that ``[n]ational ownership has a statistically
significant, negative effect on advertising prices.'' Tasneem Chipty,
CRA International, Inc., Station Ownership and Programming in Radio at
40-41 (June 24, 2007) (emphasis added). This study is consistent with
previous academic studies on advertising and consolidation in the radio
industry.
\11\ See, e.g., BIA Financial Network, Media Outlets Availability
by Markets, Attachment A to NAB Comments in MB Docket No. 06-121 (Oct.
23, 2006) (an examination of 25 Designated Market Areas of various
sizes from 1986-2006 found an average increase of 39.0 percent in the
number of full power television stations; an average increase of 42.3
percent in the number of full power radio stations; an increase in
multichannel video programming service penetration from 52.0 percent to
86.5 percent; and an increase in the average number of cable delivered
channels in use from 31.7 channels in 1986 to 283.3 channels in 2006).
This BIA Financial Network study also showed that, on average, there
were 8.8 different owners of the 11.7 full power television stations,
and 37.6 different owners of the 73 radio stations, in these DMAs.
\12\ See Scott Roberts, Jane Frenette and Dione Stearns, A
Comparison of Media Outlets and Owners for Ten Selected Markets (1960,
1980, 2000) (Sept. 2002).
\13\ See BIA Financial Network, A Second Look at Out-of-Market
Listening and Viewing: It Has Even More Significance, Attachment C to
NAB Comments in MB Docket No. 06-121 (filed Oct. 23, 2006).
\14\ Steven Berry and Joel Waldfogel, Mergers, Station Entry, and
Programming Variety in Radio Broadcasting, National Bureau of Economic
Research, Working Paper 7080 at 25-26 (April 1999). Accord Steven Berry
and Joel Waldfogel, Do Mergers Increase Product Variety? Evidence from
Radio Broadcasting, 116 Q. J. Econ. 1009 (Aug. 2001); BIA Financial
Network, Has Format Diversity Continued to Increase?, Attachment A to
NAB Comments in MM Docket Nos. 01-317 and 00-244 (filed March 27,
2002); Bear Stearns Equity Research, Format Diversity: More from Less?
(Nov. 2002); BIA Financial Network, Over-the-Air Radio Service to
Diverse Audiences, Attachment G to NAB Comments in MB Docket No. 06-121
(filed Oct. 23, 2006).
\15\ Over-the-Air Radio Service to Diverse Audiences at 9-10; 13-
14. This study also documented growth in the number of Urban programmed
stations and Asian language stations. See Id. at 10-12.
\16\ See David Pritchard, A Tale of Three Cities: ``Diverse and
Antagonistic'' Information in Situations of Local Newspaper/Broadcast
Cross-Ownership, 54 Fed. Comm. L.J. 31 (2001); David Pritchard
Viewpoint Diversity in Cross-Owned Newspapers and Television Stations:
A Study of News Coverage of the 2000 Presidential Campaign (Sept.
2002). An examination of 2004 Presidential endorsements similarly found
no pattern among the endorsements made by commonly owned newspapers,
with newspapers owned by the same company frequently endorsing
different candidates. See Comments of Media General in MB Docket No.
06-121, Appendix 6 (filed Oct. 23, 2006).
\17\ See Jeffrey Milyo, The Effects of Cross-Ownership on the Local
Content and Political Slant of Local Television News (June 13, 2007)
(Milyo Television News Study).
\18\ Matthew Gentzkow & Jesse Shapiro, What Drives Media Slant?
Evidence from U.S. Daily Newspapers at 4-5, 43-44 (Nat'l Bureau of
Econ. Research, Working Paper No. 12707, 2006).
\19\ Arbitron/Edison Media Research, Internet & Multimedia 2007
Report Summary, at 1, June 26, 2007.
\20\ Nielsen Media Research, Inc., Federal Communications
Commission Telephone Study: May 7-27; May 29-31; June 1-3, 2007 (FCC
Study I).
\21\ Compare Nielsen Media Research, Inc., Consumer Survey on Media
Usage (Sept. 2002), at 88, 90, 94, with FCC Study I at 4, 30, 72
(showing that number of respondents not using traditional media,
including radio and television, increased substantially between 2002
and 2007).
\22\ John Horrigan and Aaron Smith, Pew Internet & American Life
Project, Home Broadband Adoption 2007 at 11-12 (June 2007).
\23\ Mary Madden, Pew Internet & American Life Project, Online
Video at i (July 25, 2007) (Pew Online Video Report).
\24\ Lee Rainie and John Horrigan, Pew Internet & American Life
Project, Election 2006 Online at ii (Jan. 17, 2007) (Pew 2006 Election
Report).
\25\ See NAB Ex Parte in MB Docket No. 06-121 at 14-15 (filed Nov.
1, 2007) (giving numerous examples of the growth of the Internet in the
2008 campaign).
\26\ Reno v. ACLU, 521 U.S. 844, 870 (1997).
\27\ See Comments of NAB in MB Docket No. 04-233 (filed Nov. 1,
2004) Reply Comments of NAB in MB Docket No. 04-233 (filed Jan. 3,
2005).
\28\ See Milyo Television News Study; Gregory Crawford, Television
Station Ownership Structure and the Quantity and Quality of TV
Programming (July 23, 2007); Daniel Shiman, The Impact of Ownership
Structure on Television Stations' News and Public Affairs Programming
(July 24, 2007) (Shiman Ownership Structure Study).
\29\ A 2002 FCC study concluded that network affiliated television
stations co-owned with newspapers received higher ratings for their
local news programs, aired more hours of local news, and received a
higher number of awards for local news than other network affiliates.
See Thomas Spavins, Loretta Denison, Scott Roberts and Jane Frenette,
The Measurement of Local Television News and Public Affairs Programs
(2002).
\30\ Michael G. Baumann and Kent W. Mikkelsen, Economists
Incorporated, Effect of Common Ownership or Operation on Television
News Carriage: An Update, Attachment to NAB Comments in MB Docket No.
06-121 (filed Nov. 1, 2007) (a station in a same-market combination is
6.2 percent more likely to carry such programming than a station that
is not in such a local combination).
\31\ See BIA Financial Network, Economic Viability of Local
Television Stations in Duopolies, Attachment H to NAB Comments in MB
Docket No. 06-121 (filed Oct. 23, 2006); BIA Financial Network,
Television Local Marketing Agreements and Local Duopolies: Do They
Generate New Competition and Diversity?, Attachment A to Comments of
Coalition Broadcasters in MB Docket No. 02-277 (filed Jan. 2, 2003).
\32\ Further Comments of Consumers Union, Consumer Federation of
America and Free Press in MB Docket No. 06-121 at 98 (filed Oct. 22,
2007) (Comments of Consumers Union, et al.).
\33\ The current rule limits the formation of duopolies only to
large markets. This rule allows an entity to own two television
stations in the same DMA only if at least one of the stations in the
combination is not ranked among the top four stations in terms of
audience share, and at least eight independently owned and operating
commercial and noncommercial full power television stations would
remain in the DMA after the combination. In 2002, the Court of Appeals
for the D.C. Circuit found that the FCC had failed to justify its
exclusion of nonbroadcast media, including cable television, from the
duopoly rule's eight voice threshold, and remanded the rule to the FCC
for further consideration. See Sinclair, 284 F.3d at 165, 169. This
remand remains pending at the FCC and the eight voice standard still
remains in effect.
\34\ 2002 Biennial Regulatory Review, Report and Order and Notice
of Proposed Rulemaking, 18 FCC Rcd 13620, 13698 (2003) (2002 Biennial
Review Order). NAB has further documented the ``different economics of
station ownership depending on market size.'' Id. See, e.g., Local
Television Market Revenue Statistics, Attachment F to NAB Comments in
MB Docket No. 06-121 (filed Oct. 23, 2006); NAB, Ex Parte in MB Docket
No. 06-121 (filed Sept. 25, 2007) at Attachments B, E & F.
\35\ Kiran Duwadi, Scott Roberts and Andrew Wise, Ownership
Structure and Robustness of Media at 5, 11 (2007) (FCC Media Robustness
Study) (reporting 439 locally owned television stations in 2005).
\36\ Independent Radio Voices in Radio Markets, Attachment B to NAB
Comments in MB Docket No. 06-121 (filed Oct. 23, 2006).
\37\ See, e.g., Percentage of Industry Revenues Earned by Top 10
Firms in the Sector, Attachment E to NAB Comments in MB Docket No. 06-
121 (filed Oct. 23, 2006).
\38\ NABEF sponsors Media Sales Institutes at Howard University,
Florida A&M, and the Spanish Language Media Center of the University of
North Texas. These intensive ten-day training programs prepare talented
students with diverse backgrounds for sales careers in the broadcast
industry. To date, these programs have trained over 220 students for
media sales careers. Close to 90 percent have been hired.
\39\ See Reply Comments of The Center for Regulatory Effectiveness
in MB Docket No. 06-121 at 2-4 (Oct. 2007) (explaining why ownership
restrictions artificially depress the value of broadcast stations,
harming both current and potential female and minority station owners).
\40\ See Comments of NAB in RM-11388 (filed Sept. 5, 2007);
Comments of NAB in MB Docket No. 06-121 (filed Oct. 1, 2007); Reply
Comments of NAB in MB Docket No. 06-121 (file Oct. 16, 2007).
\41\ See Allen Hammond, et al., The Impact of the FCC's TV Duopoly
Rule Relaxation on Minority and Women Owned Broadcast Stations 1999-
2006 (2007).
\42\ B.D. McCullough, Peer-Review Report on ``The Impact of the
FCC's TV Duopoly Rule Relaxation on Minority and Women Owned Broadcast
Stations 1999-2006'' by Hammond, et al., (finding that the Hammond
study failed to consider or control for economic, demographic or other
differences in television markets and that such errors ``pervade[ ]
every aspect of the analysis'').
\43\ Comments and Data Quality Petition of The Center for
Regulatory Effectiveness in MB Docket No. 06-121 (Oct. 2007) (arguing
that the FCC cannot use or rely upon the Hammond duopoly study).
\44\ See Appendix A, The Lack of Racial and Gender Diversity in
Broadcast Ownership & The Effects of FCC Policy: An Empirical Analysis
at Table 13 (Sept. 2007), attached to Comments of Consumers Union, et
al., in MB Docket No. 06-121 (filed Oct. 1, 2007) (showing that members
of minority groups owned 40 full power commercial television stations
in 1998, 35 stations in 2000, and 44 stations in 2006).
\45\ National Telecommunications and Information Administration,
Changes, Challenges, and Charting New Courses: Minority Commercial
Broadcast Ownership in the United States at 38 (Dec. 2000). See also
Kofi A. Ofori, Radio Local Market Consolidation & Minority Ownership at
10-12, Attached as Appendix One to Comments of MMTC in MM Docket Nos.
01-317 and 00-244 (filed March 27, 2002) (showing increase in the
number of minority owned and controlled radio stations since 1997).
______
November 7, 2007
Chairman Daniel K. Inouye,
Senate Commerce Committee,
Washington, DC.
Ranking Member Ted Stevens,
Senate Commerce Committee,
Washington, DC.
Re: November 8, 2007 Senate Commerce Committee Hearing,
``Localism, Diversity and Media Ownership''
Dear Senators Inouye and Stevens:
On behalf of the Independent Film and Television Alliance (IFTA),
which represents independent film and television producers and has more
than 180 member companies, I would like to submit this letter for the
record. These companies, who produce and distribute entertainment
programming that is financed outside of the seven major U.S. studios,
are responsible for more than 400 films each year and countless hours
of television programming. Collectively, they generate more than $4
billion in distribution revenues annually. Since 1980, over half of the
Academy Award winners for best picture have been produced or
distributed by IFTA members, including this year's ``The Departed,''
last year's ``Crash,'' and the prior years' ``Lord of the Rings'' and
``Million Dollar Baby.''
IFTA commends the Committee for holding this hearing and for its
continued oversight on the important issue of media consolidation. IFTA
would like to call the Committee's attention to an important aspect of
this debate--the inability of independent producers to distribute their
product today in the television marketplace through either broadcast or
cable networks. Source diversity has been virtually eliminated in
American television, and the loser is the American viewer. IFTA has
filed comments at the FCC, calling on the FCC to examine this aspect of
media consolidation and to reinstitute regulatory safeguards to restore
competition and diversity. IFTA urges this committee to encourage the
FCC to address the issue of source diversity in the pending Media
Ownership Proceeding. This guidance is particularly important in light
of the FCC's decision in the previous Biennial Review to defer action
on this issue.
Since the elimination of the Financial Interest in Syndication
Rules (Fin/Syn) and their related consent decree, there has been a sea
change in the television marketplace. Through the early 1990s, for
example, independent production companies were able to sell programming
to broadcast networks. This provided diverse, high-quality programming
to the American public. From 1980 through the demise of Fin/Syn in the
early nineties, nearly half of the Emmys given for ``Best Drama'' and
``Best Comedy'' series were awarded to independent producers. Since
then, independent production has fallen from 50 percent in 1995 to only
18 percent of primetime programming today.
Independents are currently only able to sell their products to
networks at below-cost prices and are forced to relinquish syndication
rights. Additionally, major television networks have stopped acquiring
independent feature films or movies-of-the-week for broadcast. And, a
number of IFTA members have been advised by networks or cable channels
that they would no longer acquire independently produced children's
programming or family films unless ownership rights are included and
they can control its content with ``traditional'' family themes being
expressly out of favor. As a result, many Members have been forced to
abandon production of this type of programming.
As a result of the easing of program diversity regulation, there
has been a decline in quality, creativity and diversity of programming.
IFTA respectfully requests that the Congress encourage the FCC to
reinstitute reasonable regulation to ensure program diversity.
Specifically, IFTA seeks a 75 percent cap on the amount of self-
produced network programming that major broadcast and cable networks
may distribute. Without such action, independent voices will continue
to be silenced and the diversity of programming for the American viewer
will continue to decline.
Sincerely,
Jean M. Prewitt,
President and CEO,
Independent Film & Television Alliance.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
Alex Nogales
Question 1. Are you aware of any studies on the effect of media
consolidation on hate speech? If the FCC convenes a minority ownership
task force, should the task force study the issue of hate speech?
Answer. In 1993, the U.S. Department of Commerce, National
Telecommunications and Information Administration (NTIA) published a
report titled ``The Role of Telecommunications in Hate Crimes.'' This
report needs to be updated to reflect the current telecommunications
environment which includes the increase popularity of talk radio and
the Internet. Earlier this year, Congressmen Dingell and Markey wrote a
letter to the NTIA requesting an update on this study. Senator Menendez
recently wrote to Commerce Secretary Gutierrez making the same request.
It is imperative that this government study be updated to confirm or
deny the linkage between hate speech in the media and the increase of
hate crimes, which has already been documented.
The Anti-Defamation League recently released a report titled
``Immigrants Targeted: Extremist Rhetoric Moves into the Mainstream''
posted at http://www.adl.org/civil_rights/anti_immigrant/ that
addresses how the strategy of blaming immigrants for all of society's
ills is now spreading to mainstream America. The FBI released its 2006
Hate Crime Statistics showing that in 2006 hate crimes against Latinos
increased by 25 percent since 2004. To read the FBI's press release, go
to http://www.fbi.gov/ucr/hc2006/pressrelease.html. Additionally, the
Southern Poverty Law Center will soon release a report on the most
egregious of these hate crimes. And as they note, this is not a city,
regional, or state occurrence, it is a national one. The violence isn't
just against the undocumented; it is also against documented Latinos
and citizens because no one can tell one from the other.
Question 2. What are the major obstacles to minority media
ownership?
Answer. The greatest obstacle to minority ownership is media
consolidation. The majority of radio and TV licenses were granted
during a period of time in our country when segregation was still
legal. The history of racism in the United States has prevented people
of color to build wealth. When segregation ended, people of color were
still not in a position to purchase stations because of the lack of
wealth that exist within communities of color. People of color have to
seek bank loans if they want to buy a station. But they are less likely
to receive a bank loan, particularly when the price of the station
continues to increase as a result of consolidation. The historic
barriers to ownership have only increased with consolidation.
A recent study from the non-profit group Free Press found that the
pressures of consolidation and concentration brought on by bad policy
decisions have crowded out minority owners, who tend to own just a
single station and find it difficult to compete with their big-media
counterparts for programming and advertising revenue.
Free Press' analysis suggests that minority-owned stations thrive
in more competitive, less concentrated markets. Even if the size of the
market is held constant, markets with minority owners are significantly
less concentrated than markets without minority owners.
The probability that a particular station will be minority-
owned is significantly lower in more concentrated markets, even
if market and station characteristics are controlled for.
White male and large corporate station owners tend to own
far more stations than their minority and female counterparts.
Question 3. Do you believe that broadcast licensees should have to
satisfy specific public interest standards? If so, what specific public
interest standards do you recommend?
Answer. The Communications Act of 1934 requires the broadcast
licensees to serve the ``public interest, convenience, and necessity''
in exchange for their use of a scarce public asset--the airwaves--for
free. As public trustees, the Federal Communications Commission (FCC)
has found that broadcasters must provide reasonable access to
candidates for Federal elective office to enhance our Nation's
political discourse, to provide a minimum amount of children's
educational programming, and to serve local civic, informational,
minority and disability needs of the public.
However, forces of consolidation over the past decade have greatly
diminished any meaningful fulfillment of public interest obligations on
the part of the broadcast licensees. The trends of horizontal
conglomeration and vertical integration in the broadcast industry have
led to drastic reduction in the amount of independently produced
programming, a reduction in local public affairs coverage, and
diminished reporting on local candidate races.
We support the Broadcast Licensing in the Public Interest Act
introduced by Congresswoman Anna G. Eshoo that would revive the public
interest standard.
First, the bill reduces a broadcast license term from eight
years to three. The 3-year term will bring greater oversight
and scrutiny to license renewals.
Second, the bill requires broadcast licensees seeking a
renewal to demonstrate that they have made a dedication to
civic affairs of its community and to local news gathering. The
bill also mandates that broadcasters air locally produced
programming and make a commitment to provide a public
presentation of the views of candidates and issues related to
local, statewide or national elections.
Finally, the bill mandates that broadcasters provide quality
educational programming for children.
Question 4. How can we make sure that the digital transition
results in more coverage of issues important to the local community and
to a diverse population?
Answer. The DTV transition will increase efficient use of the
spectrum, expand consumer choice for video programming, and increase
the amount of spectrum available for public safety and other wireless
services. As television broadcasters prepare for their transition to
digital television in 2009, Congress has a unique opportunity to
improve broadcasters' service to the public by enhancing diversity of
viewpoints, promoting civic participation, expanding local, community
and children's programming and carrying minority networks. We support
the creation of an FCC Public Interest Obligations task force to study
the matter and make recommendations that will produce the desired
results.
______
Response to Written Question Submitted by Hon. Frank R. Lautenberg to
Timothy F. Winter
Question. Do you believe that broadcast licensees should have to
satisfy specific public interest standards? If so, what specific public
interest standards do you recommend?
Answer. Thank you very much for the question. The issue of public
interest obligations for broadcasters has been at issue at the FCC
since the dawn of the agency and has been magnified by the digital
transition and the much greater bandwidth afforded broadcasters in the
multicast era. While there are many valid and reasonable suggestions
for public interest standards, I will focus on those consistent with
the mission of the Parents Television Council: to protect children from
sex, violence and profanity in entertainment.
Broadcast licensees must commit themselves to abide by the spirit
as well as the letter of the law as it addresses the issue of broadcast
indecency. Unfortunately, the broadcast networks have challenged the
FCC's adjudication of Federal broadcast decency law and have asserted a
``right'' to air profanity at any time of day, even when we know there
to be tens of millions of children in the audience. Even worse, CBS
argued in Federal court in September that the Janet Jackson incident--a
striptease in the middle of the Super Bowl--was somehow not indecent.
In addition, broadcast licensees must commit themselves to airing
more adult-themed programming in an appropriate and responsible manner.
Shows with strong language, sex and graphic violence should be limited
to the later prime time hours. As demonstrated by our research on the
first hour of prime time--what used to be known as the Family Hour--
there is an increasing shift of more graphic content migrating toward
the earlier times. It is in the public interest to protect children
from this type of programming, so it should be within broadcast
licensees' public interest requirements to adhere to a reasonable and
time-honored restriction of adult content to the later time slots.
Finally, PTC research has shown an alarming lack of consistency and
transparency in the current TV Ratings system. In fact, television
ratings are inaccurate as much as 60-80 percent of the time. Without a
consistent, accurate and transparent ratings system, parents and
families can have no confidence in the v-chip or any other parental
control devices designed to protect children from graphic content. It
is clearly in the public interest for broadcasters to give parents the
tools they need to protect their children, and it should be incumbent
upon licensees to adopt a new ratings system that embodies a more
trustworthy approach.
______
Response to Written Questions Submitted by Hon. Frank R. Lautenberg to
James F. Goodmon
Question 1. You have advocated holding broadcast licensees to
minimum public interest standards. What specific public interest
standards do you recommend?
Answer. Since participating on the Gore Commission in 1998, I have
advocated for the following minimum public interest obligations:
Public Affairs Programming--two hours weekly phased in as
follows: six months--one-half hour; twelve months--one hour or
two half-hours; and eighteen months--two hours. At least 1 hour
of public affairs programming should be locally produced and
should run between the hours of 6 and 11 p.m. News should be
excluded from public affairs minimums. Thirty to sixty days
before a general election public affairs programming should
focus on candidate-centered election issues.
Public Service Announcements (``PSAs'')--110 to 150 per week
for each station or multicast channel. At least half of the
PSAs should be locally produced and directed toward local
issues and a significant number should run in prime time for
television and drive times for radio.
These minimums would clarify to all public airwaves stakeholders
what is expected. Although I believe many broadcasters will exceed
these standards, these will give broadcasters and the public a starting
point.
Question 2. What ramifications do you think there should be for
broadcasters who fail to meet minimum public interest standards?
Answer. With the FCC's adoption of its Standardized Disclosure
item, our viewers will now be able to view our public files online.
Therefore, I support leaving it to our viewers to hold broadcasters
accountable directly and at the FCC.
Question 3. The ``UHF discount'' rule allows UHF stations to count
only 50 percent of the local designated market area (DMA) for purposes
of the national television ownership cap. How will the digital
transition on February 17, 2009 affect the UHF discount?
Answer. As background: The UHF discount was originally adopted in
1985 to equalize the differences in coverage between an analog UHF
(off-air channels 14-69) and VHF (off-air channels 12-13) television
channel. Typically, in the analog world, because a UHF station operates
at higher frequencies, it is subject to greater terrestrial
interference than a VHF station. As noted many times in FCC reports and
orders, the singular purpose of the UHF discount was to compensate for
the audience reach handicap of UHF stations. Not factoring in the
digital transition, technological advancements and cable and satellite
carriage have diminished the need for the UHF discount. These
advancements include improved UHF television receiver standards that
are markedly different than 1985 and the ability of UHF stations to
maximize power. Also, today cable and satellite carriage exceed 86
percent of all U.S. TV households compared to 30 percent penetration in
1985 when the UHF discount was adopted. Mandatory cable and satellite
carriage ensure that UHF stations can reach viewers the same as VHF
stations within a market, resulting in no distinction between UHF and
VHF stations.
With the digital transition, there is more tangible evidence that
the need for the UHF discount has disappeared. As evidence of
improvement in UHF signal coverage, 94 percent of all digital
television stations will be UHF. Almost all stations elected to
``maximize'' their market coverage rather than just replicate their
analog signals. As noted in the FCC's 2002 Biennial Review, 18 FCC Rcd
at 12847: ``At this point, however, it is clear that the digital
transition will largely eliminate the technical basis for the UHF
discount because UHF and VHF signals will be substantially equalized.''
Although Capitol has long advocated that the UHF discount should be
eliminated for all of the above reasons, a practical question arises on
February 18, 2009, how do you count a station that was on a VHF channel
in the analog world, but moves to a UHF channel for digital? If the
answer is that station is now counted at 50 percent, not 100 percent,
then more consolidation can happen, and for all practical purposes, the
39 percent national television cap becomes a 78 percent cap.
Question 4. How can we make sure that the digital transition
results in more coverage of issues important to the local community?
Answer. Multicasting allows stations the flexibility to offer much
more local programming. In Raleigh-Durham, Capitol launched a 24-hour
news channel supported by our WRAL news staff. The WRAL NewsChannel
allows WRAL to better inform its viewers on local matters, while
continuing to entertain them with its CBS and syndicated programming on
WRAL-DT.1. The WRAL NewsChannel does much more than recycle WRAL's
newscasts. Here are some examples of the breadth of coverage:
Complete coverage of the Duke lacrosse case, including gavel
to gavel coverage of the three hearings and trial, 6 days of
coverage of proceedings related to Durham District Attorney
Mike Nifong's actions, and the Durham/Duke Special Panel Review
meeting.
Two days of coverage of former Speaker of the NC House Jim
Black's hearings before a state board due to misconduct.
Hosted extended-length forums on subjects including the
death penalty and transportation.
Televised the NC Court of Appeals hearing on a challenge to
the NC State Lottery.
Televised the funeral of long-time Wake County Sheriff John
Baker.
Televised numerous full-length press conferences.
Based on the needs of the community, multicasting allows you to in
effect narrowcast--something that is difficult to do in the traditional
analog, one-channel world. In addition, Capitol supports the
application of minimum public interest standards on each multicast
channel. Unfortunately, there is no multicasting must carry or carry
one/carry all. With cable and satellite carriage accounting for more
than 86 percent of our audience, retransmission deals are critical to
the success of any multicast channel.
Thank you very much and please let me know if you would like more
information.