CU/CFA: FCC poised to kill watchdogs

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If the Federal Communications Commission permits newspaper/broadcast combinations
in the top 150 markets, consumer groups warned, it will effectively euthanize
media watchdogs in markets reaching 90 percent of viewers.

The number of markets where there are sufficient voices to allow "one or two"
such combinations are at most 10, and any consolidation must be based on
rigorous analysis and some key principals, including an affirmative "added-voice" requirement where needed.

That was the message from the Consumers Union and the Consumer Federation of
America, which took aim at the FCC's expected June 2 ownership-rule changes in a
press conference Wednesday.

The two groups voiced their opinions despite the concession that a major relaxation of the
newspaper/broadcast cross-ownership ban appears destined for approval June 2.

CU senior director of public policy Mark Kimmelman said the FCC's planned new rules would "blow away any meaningful limitation on
ownership" in those 150 markets, to the detriment of diversity's most important
role: "Media companies competing against each other to get different angles on
the story and play a watchdog role on each other."

Kimmelman began Wednesday's press conference by noting "again the absence of
the national television networks covering this event that deals with their
business interests."

Kimmelman contended that the FCC has a "mountain of evidence" on which to
base meaningful rules, but it chose instead to "disregard those facts to benefit a
handful of media companies."

Said Mark Cooper, director of research for CFA: "What the FCC has done is
abandoned rigorous analysis." What analysis they have done, he added, looks "at
the wrong product -- entertainment, as opposed to news" -- and is incorrect because
they "refuse to analyze market shares and have set a ridiculously low standard
for the voice test."

Cooper said mergers in one- and two-paper towns would violate antitrust
rules "by a factor of 10 or 20."

The reason he is not knocking on the Justice Department's door instead of the
FCC's, Cooper said, is that the Communications Act provided for greater scrutiny
for the press because "antitrust laws are concerned with commerce, not
democracy."

But if the CU and CFA don't like the FCC proposal -- or what it has pieced together
from news reports since, it pointed out, the proposal is not public -- what would
it do instead?

With the caveat that any loosening would be treading dangerous ground, Cooper
said newspaper/broadcast cross-ownership can be justified in, at most, 10
markets.

But even then, allowing any mergers must be rooted in rigorous local market
analysis and based on some key principals:

  • "The FCC should not encourage, allow or promote concentrated media
    markets."
  • "TV markets should not be highly concentrated because of the power of TV."
  • The FCC should espouse a pro-competitive, "added-voice" rule: "If a TV
    station wants to merge with a newspaper, say, and the TV station doesn't do
    news and commits to adding news, they get the license ... But if they drop the
    news, they lose the license, he said.

The groups also want to prevent the "Big Four" affiliates in a market from
buying a newspaper -- which would effectively reduce the number to about their 10
markets anyway -- as well as jettisoning the 50 percent disount for UHF stations in
tallying audience reach.

In expressing his own displeasure with the FCC's direction on media
ownership, Democratic commissioner Jonathan Adelstein Tuesday also called
for local market analysis of broadcast/newspaper combos and for dropping the UHF
discount.

The CU and CFA conceded that they don't think anything will stop the FCC "juggernaut"
-- a vote approving looser rules is planned for June 2 -- with Kimmelman saying
that it will likely be up to Congress to "redirect" the FCC by passing
legislation overturning the decision, or to the inevitable court cases
challenging the rules.

"The battle for media reform doesn't end on June 2," Cooper said. "It begins
on June 2."

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