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Who Cares About Ownership Rules?

As the FCC deliberates, many fear the debate has already moved on 3/09/2007 07:00:00 PM Eastern

In the four years since the FCC proposed relaxing media-ownership rules to allow companies to own more broadcast stations, CBS has shed stations, Clear Channel has begun divesting itself of all its TV and a third of its radio stations, and Tribune Co. has put its broadcasting division on the block.

As the commission gears up for another five hearings and 10 studies, with little chance of acting before 2008, it’s worth asking: Does anyone still care about media-ownership rules?

Well, yes, say industry representatives and opponents of media consolidation. But many believe the debate has been overtaken by developments in new media. And some on both sides are already moving on.

Walt Disney Co., for one, decided to take a pass on the rule this time around. In its filing with the commission last fall, the company, which owns 10 stations that reach less than a quarter of the TV households, said it was not looking for any relaxation of the rules.

“Given the increase in and attractiveness of new-media outlets,” said Susan Fox, VP of government relations, in the filing, “the commission may soon find itself considering ways to incent, rather than restrict, ownership of over-the air broadcast stations.”

Shaun Sheehan, Tribune’s top lobbyist in Washington, agrees and rips the commission for falling behind the debate.

“You have two Democratic commissioners running all around the country screaming about concentration while every transaction in the last couple of years clearly demonstrates that disaggregation has occurred,” says Sheehan, calling the deliberation “a classic scenario of the government inserting itself in an issue whose time has come and gone.

“[Michael] Copps and [Jonathan] Adelstein are like a couple of World War I generals who are sending the troops directly into machine-gun fire,” he adds. “They haven’t figured out that technology has changed the equation.”

“Oh, so they have machine guns now?” counters Copps. “Well, the American people also have a right to bear arms. When more than 80% of Americans say local TV, radio or print is their most important source of news and information, I believe the fight against consolidation in the traditional media is a grass-roots fight worth having. A lot of good citizens agree.”

Even Jeff Chester, the executive director of the Center for Digital Democracy, who has spent much of his life battling media consolidation, thinks the government and activists might be fighting the wrong war—or at least failing to open an important new front.

“At this point, I don’t think it is going to change that much whether [News Corp. Chairman] Rupert Murdoch or Disney’s Bob Iger owns more television stations,” says Chester. “Fighting over what broadcast television looks like is kind of an anachronism when we really need to be talking about what broadband—voice, video and data—looks like.”

A TWO-PRONGED STRATEGY

Chester says he has advised anti-consolidation groups like Free Press and Media Access Project to adopt a two-pronged strategy that considers new media in tandem with broadcast. He doesn’t advocate abandoning the media-ownership battle, although he concedes that the battle may be essentially over. But he is more concerned with protecting public interest and diversity in a digital space he believes is fast being co-opted by Big Media.

“The corporate media interests—Silicon Valley, Hollywood, advertising—are defining our media future,” adds Chester. “They have created a business model based on social networks [à la News Corp.’s MySpace] to evolve a series of key platforms in every community across the country that will be powerful forces in people’s lives. All content, programming and media use is being bundled together. You won’t separate your video from where you get your [instant messaging] from where you get cellphones from where you post your photos from where you meet your friends.”

As a result, he says, the new dominant players are not going to be broadcasters but “phone, cable, a few technology companies and the advertising industry, including Google and Yahoo!, who are going to end up dominating.”

Indeed, Viacom CEO Phillippe Dauman touted just this sort of 360-degree marketing approach at last week’s Bears Stearns Media Conference. The goal, he said, is to immerse consumers in Viacom media and sell that community to advertisers.

But Free Press Communications Director Craig Aaron, echoing the FCC’s Copps, maintains that broadcast is still a priority in the ownership debate. “There’s no question that we need to work, and do work, on new-media issues,” he says. “But most Americans still get most of their news and information from broadcasters. That may be beginning to change, but we still have to protect local voices and encourage new ones.”

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