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FCC Poised to Open the Door for Unbridled Expansion of Media Empires

Monday, 04 February 2013 00:00 By Sam Knight, Truthout | Report

FCC chairman Julius Genachowski at CES 2010.FCC chairman Julius Genachowski at CES 2010. (Photo: jdlasica)If the world can learn anything from Britain's phone-hacking scandal, it's a lesson about the brute force of a media empire.

Rupert Murdoch's conglomerate was so powerful, it was allegedly able to invade people's privacy and pay police officials to grease its dodgy news gathering machine; all while playing kingmaker in British Parliamentary elections and gaining access to the highest reaches of state power.

The wealth of scandal generated by Murdoch's ventures has led to renewed calls for media reform in the UK - particularly in the realm of newspaper ownership. According to the Guardian, Ed Miliband called for Murdoch to sell at least one of his major papers - either the Times or the Sun - in June. The paper reported that the Labour leader said "News Corp had a sense of 'power without responsibility', which meant that some of the company's newspapers could operate with a 'sense of immunity' and engage in practices such as phone hacking."

But despite the problems that have emerged from Britain's concentrated media market, the Federal Communications Commission (FCC) could soon open the door for an oligarch like Murdoch to acquire more newspapers in the United States by relaxing the so-called rules on cross ownership. 

In December, FCC Chairman Julius Genachowski quietly circulated a proposal among other commissioners that would allow mergers between a radio or television station and a newspaper in the twenty largest media markets. 

The proposal, according to the New York Times, would allow mergers only if they kept eight "major media voices" in a market intact. But restrictions that would remain haven't made the floated changes any less controversial. Permanent exemptions to the rules already exist and enable mergers that could be seen as serving the public interest - Murdoch, for example, obtained such a waiver when he re-purchased the bankrupt New York Post in 1993, after having to sell the paper due to his acquisition of a New York City television station in 1988. Many Americans fear that rule tweaks like the sort Genachowski is promoting could spell the end of independence for their favorite local rag or alt weekly. 

"Some three million people signed petitions and made comments in opposition to that proposal when it was brought forth by the Bush administration," Senator Bernie Sanders, (I-Vt.), said on January 24 at a discussion about the proposed rule changes at the Newseum, just blocks from the Capitol. "Unless we act very strongly and very effectively, within the next few weeks, it will be Chairman Genachowski's FCC which, in fact, brings forth that resolution."

Aides to Senators Sanders and Maria Cantwell (D-Wash.), another opponent of cross-ownership deregulation, said that if FCC does pass its proposal, the two will consider introducing a resolution of disapproval in a bid to negate it. Truthout contacted the offices of Senate Majority Leader Harry Reid (D-Nevada), Senate Majority Whip Dick Durbin (D-Ill.) and Senate Commerce, Science and Transportation Committee Chair John Rockefeller IV (D-W.Va) for comment on a possible resolution of disapproval, but had not heard back by publication time.

When the FCC attempted to relax cross-ownership rules in 2008, the Senate, with the support of then-Senators Obama and Biden, passed such a resolution. The House never voted on it because the rule changes were challenged in court and, eventually, sent back to the FCC in 2011. 

But President Obama would have to decline to veto the likely resolution that would arise; a move that would pit him against one of his own appointees.

And if another probable appointee - Treasury Secretary choice and laissez-faire disciple Jack Lew - is any indication, the general preservation of regulatory regimes isn't high on President Obama's agenda.

What could scupper the FCC's initiative, however, is the fact that the Obama administration hasn't exactly been forthcoming about its plans for telecommunications policy. 

"They have really tried to operate under the radar screen, and we are where we are," Sanders said at the Newseum. "And where we are is there is a likelihood that within the next few weeks - very quietly - that decision will be made." 

Senator Cantwell echoed that criticism at a December 6 press conference with Sanders. 

"Unfortunately, the draft rule was circulated behind closed doors. The commission should hold firm to ensure that this rule won't get a majority if it's voted on," she said, before praising the FCC for at least deciding to delay its vote until after the new year. 

If the FCC does proceed in such an opaque manner, legal precedent indicates that the courts could undo Genachowski's initiative. The appellate court that remanded the Bush administration's proposed rule changes back to the FCC in 2011 ruled against the commission on procedural grounds. The court found numerous problems with the public comment period that occurred before the changes were approved in December 2007 - namely, that the commission's appeal for input was too vague and that the time allotted for meaningful criticism and counter-proposals was far too short. The prevailing opinion stated that the FCC didn't live up to "its obligation to make its views known to the public in a concrete and focused form so as to make criticism or formulation of alternatives possible." The court also found that the FCC failed to produce sufficient studies and draft adequate language to support its claim that the proposed deregulation would increase ownership among minorities and women. 

That the commission believes it can go ahead with similar proposals in an even more furtive way has opponents up in arms. Tim Robinson, a staffer for Rep. Bobby Rush (D-Ill.) present at the Newseum event, criticized the commission during the question-and-answer period, for "proposing rules without developing a record that substantiates the predictive judgments that regulators are making when they're developing these rules." 

"That's not enough," he said. 

In December, Representative Rush penned a letter, with four other Democrats on the House Energy and Commerce Committee, stating that the five were "deeply concerned" with the proposed changes, saying that it's the FCC's duty to "to protect and promote this localism and diversity in our marketplace of ideas."

But it seems self-evident why supporters of deregulation are proceeding without conducting procedures required by statutes: There is really only one way that rule relaxation has changed the market historically. 

"A rule that makes it easier for corporations to control more media voices will not increase the diversity in the marketplace," Senator Cantwell said at the December press conference. 

"When you come up with these cross-ownership rules, as are proposed now, you're going to push out the few independent people that are left," she later added.

At the Newseum, Sanders cited a statistic he often mentions when discussing the effects of ownership deregulation. 

"The bottom line is that in 1983, 90 percent of American media was owned by 50 companies. Today, that same 90 percent is controlled by six multinational media conglomerates. That's GE, News Corp, Walt Disney, Viacom, Time Warner, and CBS," he stated. This oligopoly emerged as a direct result of the Telecommunications Act of 1996. 

It's not necessarily that the small fries are unprofitable, either. The New Orleans Times Picayune, for example, was recently downsized significantly by its parent company Newhouse - moving from a daily to a three times per week publication - despite being a profitable venture.

But with the internet and the onset of the Great Recession - itself partially a byproduct of a corrupt corporate media - margins have diminished, putting pressure on privately owned and publicly traded companies to cut back or sell up. 

The big fish have, in turn, pressured the FCC and Congress to relax regulations that restrain their lust for acquisitions. Media conglomerates routinely lure FCC executives through the revolving door. On Jan. 29, the Los Angeles Times reported that the latest such passenger was Genachowski's former chief of staff Edward Lazarus, who was hired as general counsel by The Tribune Company, a company lobbying the FCC to relax cross-ownership rules. The National Association of Broadcasters - a major supporter of deregulation - has also increased its lobbying spending from $8.9 to $14.5 million from 2007 to 2012, according to the Center for Responsive Politics. And the stakes couldn't be higher.

"If you are concerned about the economy, if you are concerned about health care, if you are concerned about foreign policy, you must be concerned about the media," Sanders intoned. "Our right-wing friends have been able to set the stage that spending and deficit reduction are the major economic issues facing America when, in fact, recession, mass unemployment, decline in income and the growing gap between the rich and everybody else is, in fact, according to the American people, a far more important issue." 

Even if media conglomerates in America don't engage in illegal activities - such as phone hacking or bribery - they still wield immense power. 

"That a nation in which a handful of multinational media conglomerates control what we see, hear and read is a very dangerous situation for what many of us believe democracy should be," Sanders said. "That's the message. It's pretty simple."

It's also a message that the editors and broadcasters who reach the majority of Americans will neglect to give significant voice to - even for the purposes of rebutting it.

Copyright, Truthout. May not be reprinted without permission of the author.

Sam Knight

Sam Knight is a Truthout contributor and freelance journalist living in Washington, DC.


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FCC Poised to Open the Door for Unbridled Expansion of Media Empires

Monday, 04 February 2013 00:00 By Sam Knight, Truthout | Report

FCC chairman Julius Genachowski at CES 2010.FCC chairman Julius Genachowski at CES 2010. (Photo: jdlasica)If the world can learn anything from Britain's phone-hacking scandal, it's a lesson about the brute force of a media empire.

Rupert Murdoch's conglomerate was so powerful, it was allegedly able to invade people's privacy and pay police officials to grease its dodgy news gathering machine; all while playing kingmaker in British Parliamentary elections and gaining access to the highest reaches of state power.

The wealth of scandal generated by Murdoch's ventures has led to renewed calls for media reform in the UK - particularly in the realm of newspaper ownership. According to the Guardian, Ed Miliband called for Murdoch to sell at least one of his major papers - either the Times or the Sun - in June. The paper reported that the Labour leader said "News Corp had a sense of 'power without responsibility', which meant that some of the company's newspapers could operate with a 'sense of immunity' and engage in practices such as phone hacking."

But despite the problems that have emerged from Britain's concentrated media market, the Federal Communications Commission (FCC) could soon open the door for an oligarch like Murdoch to acquire more newspapers in the United States by relaxing the so-called rules on cross ownership. 

In December, FCC Chairman Julius Genachowski quietly circulated a proposal among other commissioners that would allow mergers between a radio or television station and a newspaper in the twenty largest media markets. 

The proposal, according to the New York Times, would allow mergers only if they kept eight "major media voices" in a market intact. But restrictions that would remain haven't made the floated changes any less controversial. Permanent exemptions to the rules already exist and enable mergers that could be seen as serving the public interest - Murdoch, for example, obtained such a waiver when he re-purchased the bankrupt New York Post in 1993, after having to sell the paper due to his acquisition of a New York City television station in 1988. Many Americans fear that rule tweaks like the sort Genachowski is promoting could spell the end of independence for their favorite local rag or alt weekly. 

"Some three million people signed petitions and made comments in opposition to that proposal when it was brought forth by the Bush administration," Senator Bernie Sanders, (I-Vt.), said on January 24 at a discussion about the proposed rule changes at the Newseum, just blocks from the Capitol. "Unless we act very strongly and very effectively, within the next few weeks, it will be Chairman Genachowski's FCC which, in fact, brings forth that resolution."

Aides to Senators Sanders and Maria Cantwell (D-Wash.), another opponent of cross-ownership deregulation, said that if FCC does pass its proposal, the two will consider introducing a resolution of disapproval in a bid to negate it. Truthout contacted the offices of Senate Majority Leader Harry Reid (D-Nevada), Senate Majority Whip Dick Durbin (D-Ill.) and Senate Commerce, Science and Transportation Committee Chair John Rockefeller IV (D-W.Va) for comment on a possible resolution of disapproval, but had not heard back by publication time.

When the FCC attempted to relax cross-ownership rules in 2008, the Senate, with the support of then-Senators Obama and Biden, passed such a resolution. The House never voted on it because the rule changes were challenged in court and, eventually, sent back to the FCC in 2011. 

But President Obama would have to decline to veto the likely resolution that would arise; a move that would pit him against one of his own appointees.

And if another probable appointee - Treasury Secretary choice and laissez-faire disciple Jack Lew - is any indication, the general preservation of regulatory regimes isn't high on President Obama's agenda.

What could scupper the FCC's initiative, however, is the fact that the Obama administration hasn't exactly been forthcoming about its plans for telecommunications policy. 

"They have really tried to operate under the radar screen, and we are where we are," Sanders said at the Newseum. "And where we are is there is a likelihood that within the next few weeks - very quietly - that decision will be made." 

Senator Cantwell echoed that criticism at a December 6 press conference with Sanders. 

"Unfortunately, the draft rule was circulated behind closed doors. The commission should hold firm to ensure that this rule won't get a majority if it's voted on," she said, before praising the FCC for at least deciding to delay its vote until after the new year. 

If the FCC does proceed in such an opaque manner, legal precedent indicates that the courts could undo Genachowski's initiative. The appellate court that remanded the Bush administration's proposed rule changes back to the FCC in 2011 ruled against the commission on procedural grounds. The court found numerous problems with the public comment period that occurred before the changes were approved in December 2007 - namely, that the commission's appeal for input was too vague and that the time allotted for meaningful criticism and counter-proposals was far too short. The prevailing opinion stated that the FCC didn't live up to "its obligation to make its views known to the public in a concrete and focused form so as to make criticism or formulation of alternatives possible." The court also found that the FCC failed to produce sufficient studies and draft adequate language to support its claim that the proposed deregulation would increase ownership among minorities and women. 

That the commission believes it can go ahead with similar proposals in an even more furtive way has opponents up in arms. Tim Robinson, a staffer for Rep. Bobby Rush (D-Ill.) present at the Newseum event, criticized the commission during the question-and-answer period, for "proposing rules without developing a record that substantiates the predictive judgments that regulators are making when they're developing these rules." 

"That's not enough," he said. 

In December, Representative Rush penned a letter, with four other Democrats on the House Energy and Commerce Committee, stating that the five were "deeply concerned" with the proposed changes, saying that it's the FCC's duty to "to protect and promote this localism and diversity in our marketplace of ideas."

But it seems self-evident why supporters of deregulation are proceeding without conducting procedures required by statutes: There is really only one way that rule relaxation has changed the market historically. 

"A rule that makes it easier for corporations to control more media voices will not increase the diversity in the marketplace," Senator Cantwell said at the December press conference. 

"When you come up with these cross-ownership rules, as are proposed now, you're going to push out the few independent people that are left," she later added.

At the Newseum, Sanders cited a statistic he often mentions when discussing the effects of ownership deregulation. 

"The bottom line is that in 1983, 90 percent of American media was owned by 50 companies. Today, that same 90 percent is controlled by six multinational media conglomerates. That's GE, News Corp, Walt Disney, Viacom, Time Warner, and CBS," he stated. This oligopoly emerged as a direct result of the Telecommunications Act of 1996. 

It's not necessarily that the small fries are unprofitable, either. The New Orleans Times Picayune, for example, was recently downsized significantly by its parent company Newhouse - moving from a daily to a three times per week publication - despite being a profitable venture.

But with the internet and the onset of the Great Recession - itself partially a byproduct of a corrupt corporate media - margins have diminished, putting pressure on privately owned and publicly traded companies to cut back or sell up. 

The big fish have, in turn, pressured the FCC and Congress to relax regulations that restrain their lust for acquisitions. Media conglomerates routinely lure FCC executives through the revolving door. On Jan. 29, the Los Angeles Times reported that the latest such passenger was Genachowski's former chief of staff Edward Lazarus, who was hired as general counsel by The Tribune Company, a company lobbying the FCC to relax cross-ownership rules. The National Association of Broadcasters - a major supporter of deregulation - has also increased its lobbying spending from $8.9 to $14.5 million from 2007 to 2012, according to the Center for Responsive Politics. And the stakes couldn't be higher.

"If you are concerned about the economy, if you are concerned about health care, if you are concerned about foreign policy, you must be concerned about the media," Sanders intoned. "Our right-wing friends have been able to set the stage that spending and deficit reduction are the major economic issues facing America when, in fact, recession, mass unemployment, decline in income and the growing gap between the rich and everybody else is, in fact, according to the American people, a far more important issue." 

Even if media conglomerates in America don't engage in illegal activities - such as phone hacking or bribery - they still wield immense power. 

"That a nation in which a handful of multinational media conglomerates control what we see, hear and read is a very dangerous situation for what many of us believe democracy should be," Sanders said. "That's the message. It's pretty simple."

It's also a message that the editors and broadcasters who reach the majority of Americans will neglect to give significant voice to - even for the purposes of rebutting it.

Copyright, Truthout. May not be reprinted without permission of the author.

Sam Knight

Sam Knight is a Truthout contributor and freelance journalist living in Washington, DC.


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