Consumer groups roast Diversity Index


Consumer activists Monday attacked the Federal Communications Commission’s
primary economic tool for establishing local broadcast-ownership and
cross-ownership limits.

In an analysis titled "Abracadabra! Hocus-Pocus! Making Media Market Power
Disappear with the FCC's Diversity Index," the Consumer Federation of America and
the Consumers Union accused the commission of intentionally distorting market analysis
to ensure that the way would be paved for more media consolidation.

"Every bias goes in favor of concentration and against diversity and
competition," CFA research director Mark Cooper told reporters.

Cooper promised to make the index’s shortcoming an issue in an upcoming
lawsuit to against the rules.

By ignoring broadcast stations’ audience share and news offerings in
calculations used to gauge the importance of any one media outlet, the FCC
diversity index will allow the overwhelming majority of media markets in the
United States to become highly concentrated, added CU’s director of advocacy and public
policy Gene Kimmelman.

"The FCC's Diversity Index makes a mockery of meaningful antitrust and
competitive market analysis for the sole purpose of allowing media giants to
grow larger," Kimmelman added.

The FCC created the Diversity Index as part of its just-completed review of
agency broadcast-ownership rules. The index is a mathematical tool used to
determine the impact of media concentration on news offerings and diversity of

The index is so "nonsensical" that The New York Times is considered a
less meaningful source of news in the Big Apple than the owner of three radio
stations, he complained. Other markets where the diversity index produces
"bizarre results":

  • Tallahassee, Fla.: Thomasville Tribune, daily circulation just under
    10,000, given equal weight with the Tallahassee Democrat, daily circulation
    50,000-plus. The Thomasville Tribune is also given twice as much weight
    as the local CBS affiliate, which has more 50,000 viewers per day.
  • Altoona, Pa.: The Fox affiliate, Peak Media, is given twice the weight of
    the NBC and CBS affiliates, even though both NBC and CBS have more than four times
    the viewing audience of Fox.

The groups also charged that the FCC contradicts itself regarding the Diversity Index.
For instance:

  • Although market share and news offerings were not plugged into the
    Diversity Index to set local media-concentration limits, those measures were
    used to justify abandonment of the broadcast/newspaper cross-ownership
  • In formulating the Diversity Index, the FCC said news production could
    expand with little cost, but in claiming that the relaxation of the duopoly rule
    would increase economic efficiency, it said it is expensive to expand news
    production, exactly the opposite.
  • In relaxing the duopoly rule the FCC said weaker UHF signals should
    continue being discounted by 50%, allowing a single network to own more
    stations, yet the UHF discount is ignored when determining whether a market
    has enough TV stations to permit TV/newspaper