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