Earlier this week, FCC chairman Kevin Martin announced long-promised revisions to America’s media-ownership rules. As I point out in my latest essay for the City Journal, the results were extremely disappointing and could have grave consequences for the long-term viability of struggling media operators.
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Media Deregulation Is Dead
The FCC’s toothless reforms are a victory for the status quo.
November 15, 2007
by Adam Thierer

This week, Federal Communications Commission chairman Kevin Martin announced long-promised revisions to America’s archaic, convoluted media-ownership rules. The result: no serious deregulation, just tinkering at the margins. In fact, of the half-dozen rules currently on the books, Martin is proposing to revise only one—the newspaper/broadcast cross-ownership rule. “No changes to the other media-ownership rules [are] currently under review,” Martin’s press release notes tersely, leaving many TV and radio broadcasters wondering when they will ever get regulatory relief.

The newspaper/broadcast cross-ownership rule, which has been in effect since 1975, prohibits a newspaper owner from owning a radio or television station in the same media market. In a New York Times op-ed Tuesday, Martin warned that “in many towns and cities, the newspaper is an endangered species,” and that “if we don’t act to improve the health of the newspaper industry, we will see newspapers wither and die.” Moreover, he wrote, “The ban on newspapers owning a broadcast station in their local markets may end up hurting the quality of news and the commitment of news organizations to their local communities.” In other words, newspapers need the flexibility to change business arrangements and ally with others to survive.

These are good arguments for scrapping a regulation that dates to a bygone era. But Martin isn’t proposing anything so far-reaching. Instead, he would loosen the rule only in the nation’s 20 largest media markets—and only for newspapers, not other struggling sectors like broadcast radio. His proposal pales beside a previous reform effort in 2003, when then-FCC chairman Michael Powell advocated relaxing the newspaper/broadcast cross-ownership rule in 170 media markets. Martin’s new rule would stipulate that, if the transaction involved a television station, at least eight independently owned and operated major media voices—defined as major newspapers and full-power, commercial TV stations—would have to remain in the local media markets following the transaction. Further, the TV station involved in the deal could not be one of that market’s top four stations.

But the deregulatory micromanagement doesn’t end there. Under Martin’s new rule, even if a media operator qualifies for a transaction, the FCC can ultimately stop it if it doesn’t satisfy other subjective criteria. For example, the commission will consider whether the new entity “will increase the amount of local news in the market,” “continue to exercise its own independent news judgment,” and make a “commitment to invest significantly in newsroom operations.”

This isn’t deregulation; it’s reregulation. Such subjective criteria will invite protracted fights at the FCC about every proposed media deal, and open the door to new forms of regulatory meddling by policymakers looking to extract unrelated concessions—from favorable political ad rates to coverage of pet issues—from struggling firms in exchange for relief. In other words, the FCC will throw you a life preserver only after your head’s already underwater—and then they’ll force you to make all sorts of promises before reeling you in. It’s inexplicable how the FCC gets away with any of this in a nation that values media operators’ First Amendment rights.

[to read the entire article, please visit the City Journal website by clicking here]