MacroScan (Printable Version) - The Cost of Media Consolidation

Even as CNN's Ted Turner argues that the pursuit of power and profit led sections of the media to advocate war against Iraq, changes in the U.S. telecommunications law are expected to pave the way for an increase in the concentration of media control.

Television viewers the world over have only just experienced the spectacle of "embedded" correspondents delivering biased and periodically wrong "reports" of "their" war in Iraq through the global arms of the United States' media. Not surprisingly, the credibility of the U.S. media among those with the willingness and the ability to be objective has fallen to the lowest levels in recent history. What is surprising, however, is the support these sections have received from a leading icon of the U.S. media.

In the last week of April, Ted Turner, the founder of Cable News Network (CNN), reportedly declared that Rupert Murdoch had helped start the U.S. war against Iraq by using his newspapers and television stations to advocate such a war.

It is indeed true that the New York Post controlled by Murdoch aggressively advocated the war in Iraq and described the group of countries opposing it as the "Axis of Weasel". It is also true that Bill O'Reilly, a political commentator in Murdoch's News Corp-controlled Fox News television, called for a boycott of French products in protest against France's opposition to the war. But what makes Murdoch's behavior different from that of Turner's, who as Vice-Chairman of AOL Time Warner oversaw the operations of CNN during the Iraq war and continues to do so till May, when he steps down as part of an internal reshuffle? CNN and its sister companies could hardly be cited as examples of news outlets that were critical either of the Bush administration's decision to go to war or of the way the war was conducted.

Turner's candor went far enough to provide an answer to these questions. Speaking at a Commonwealth Club of California event in San Francisco, he explained News Corp's advocacy of war in terms of Murdoch's desire for profit. Murdoch promoted the war, he is said to have argued, "because it's good for his newspapers and good for his television stations". The cynical race for readership and viewer ship rather than belief, Turner seems to suggest, motivated News Corp's reportage. And he does seem to have won. Fox News' strategies have ensured that it has a larger audience than competing networks, including CNN, CNBC and MSNBC.

Ted Turner is clearly not convinced that the war was necessary and wants proof that Iraq had the weapons of mass destruction that provided the Bush administration with its justification of the war. "I want to see the proof," Turner is reported to have said, "I want to see what we went to war for." This implies that, despite the views he now espouses, CNN adopted the stance it did either because of the fact that he is not in control or because of the competition from Fox News and other channels.

Turner possibly thinks it is a bit of both. He admitted that he was soon stepping down as AOL Time Warner Vice-Chairman overseeing CNN and other networks because he had been "fired". So the network must have been slipping out of his control. But he went on to say that the U.S. media was too concentrated, and that the big five groups in the broadcasting business (News Corp/Fox, AOL Time Warner/CNN, Disney Co/ABC, Viacom/CBS and General Electric/NBC), which control 99 per cent of what Americans see and hear, "don't have the public's interest at heart". Turner is reported to have rued the fact "that the media is too concentrated... Too few people control too much, especially considering that I'm not one of them."

This candid statement of the connection between media power, the search for profit and events such as war from a leading insider, supports much of what critical commentators such as Ben Bagdikian, Noam Chomsky, Edward Herman and Robert McChesney have been arguing for quite some time now. Writing in 1997, Bagdikian pointed to the fact that over the previous five years, a small number of private corporations had acquired unprecedented control over public communications power, including the news. This was disturbing since many of these entities were the prime or sole source of information to a section of the American public. In support, he noted: "Of the 1,500 daily newspapers in the country, 99 per cent are the only daily in their cities. Of the 11,800 cable systems, all but a handful are monopolies in their cities." A few corporations were acquiring a number of these and that trend, he argued, would accelerate in the aftermath of the passage of the Telecommunications Act of 1996, which liberalised rules regarding mergers and acquisitions. "At issue is not just a financial statistic," he warned. "At issue is the possession of power to surround almost every man, woman and child in the country with controlled images and words, to socialise each new generation of Americans, to alter the political agenda of the country." Turner has merely speculated on one consequence of that prediction, which has meant mass murder and devastation for the people of Iraq.

The danger now is that this power of a few media corporations is likely to increase. On June 2 this year, the U.S. Federal Communications Commission (FCC), chaired coincidentally by Michael Powell son of U.S. Secretary of State Colin Powell, is to meet to vote on a report that is expected to recommend far-reaching liberalisation of even the existing diluted regulation of the media. The report being prepared by Ken Ferree, the director of the media bureau of the FCC, is the result of a biennial review of media laws mandated by the 1996 Act.

Powell, who took charge of the FCC in January 2001, is known to be committed to relaxing controls on telecom and media ownership and favourably disposed to the big media corporations. His problem is that the FCC has four Commissioners, besides himself, two of whom are Democrats and two are Republicans. Thus, with the two Democrats (Michael Copps and Jonathan Adelstein) ranged against his proposals, he needs the support of the two Republican Commissioners to change the law as well of the courts that are the ultimate arbiters of telecom and media rules. In February this year, he attempted to push through measures that would help reduce burdensome competition between local Baby Bell telecom operators. He failed, however, because Kevin Martin, one of the Republican Commissioners, chose to oppose the move even at the cost of being dubbed by some as a Republican renegade.

Deregulation of the media is even more controversial, since there has been strong opposition to some of the changes being advocated from unions, trade associations, consumer activists, think-tanks and academicians, who understandably fear that these would only increase the power of the media barons to manipulate public debate. The regulations currently in place that are being reviewed include the following:

The TV-Radio Cross-ownership Rule, prohibiting one party from owning a television and radio station in the same market, although entities in the 50 largest media markets can obtain waivers.
The Dual-Network Rule, which prohibits one broadcast network from owning another.
The Local Television Ownership Rule, prohibiting one party from owning, operating or controlling two or more broadcast television stations, unless one is ranked below the top four.
The National Television Ownership Rule, in which no single owner can reach more than 35 per cent of television households, nationally.
The Broadcast-Newspaper Ownership Rule, prohibiting broadcasters from owning a daily newspaper and broadcast outlets in the same city.
The Local Radio Ownership Rule which allows one entity to own only up to eight commercial radio stations.

It should be obvious that given the past record of the big media players in the U.S., relaxing one or more of these regulations would set off a merger-and-acquisition wave that would concentrate power over the media even further. The opposition to deregulation is based on the twin dangers of lack of diversity and media manipulation. Common ownership can result in the same selectively chosen information and the same opinions being purveyed by different media outlets. That this does happen was acknowledged as far back as 1978 even by the U.S. Supreme Court which in FCC vs National Citizens Committee for Broadcasting, argued: "It is unrealistic to expect true diversity from a commonly owned station-newspaper combination. The divergence of their viewpoints cannot be expected to be the same as if they were antagonistically run." If this lack of diversity is combined with an urge to manipulate the news, the effects would obviously be disastrous.

Critics point to the results of the last experiment with relaxation of rules to defend this apprehension. The 1996 Telecommunications Act had partly liberalised rules allowing media companies to acquire as many television stations as they wanted so long as their reach does not exceed 35 per cent of U.S. households. The results were as expected. At the moment, CBS owns 21 stations; ABC 10; NBC 13; and Fox 33.

That Act also singled out radio for massive ownership deregulation. Since the passing of the Act, Clear Channel Communications, the leading radio and concert conglomerate in the U.S., has expanded from 40 stations to 1,225 stations. The net result is that there has been a 34 per cent decline in the number of radio station owners, a 90 per cent rise in advertising rates, evidence from artists that they are "shackled by the anti-competitive practices of the conglomerates", and complaints of an increase in indecent broadcasts. As a result, even Michael Powell, who normally argues that media ownership rules do not reflect the realities of a modern media marketplace, had to admit before a Senate Commerce Committee hearing that he was "concerned about the concentration, particularly in radio".

Despite the opposition and the evidence, it is more than likely that the FCC would approve major changes in rules in June, since the differences between Kevin Martin and Michael Powell are not too sharp. Martin is reported to have said: "The courts have been looking at our decision to keep these rules with increased suspicion. We need to recognise that there are new voices in the marketplace." Martin is reportedly also not averse to cross-ownership between newspaper and broadcast outfits, and only in favour of using a simple "diversity index" to decide on retaining such regulation in particular small markets.

If in addition Martin is right about the attitude of the courts, deregulation is in the air. Going by Ted Turner's assessment, this means that the American public and the world at large just have to wait and watch for the next devastating adventure that an even more concentrated media would advocate.



Themes > Current Issues	15.05.2003


The Cost of Media Consolidation

C.P. Chandrasekhar

Even as CNN's Ted Turner argues that the pursuit of power and profit led sections of the media to advocate war against Iraq, changes in the U.S. telecommunications law are expected to pave the way for an increase in the concentration of media control. Television viewers the world over have only just experienced the spectacle of "embedded" correspondents delivering biased and periodically wrong "reports" of "their" war in Iraq through the global arms of the United States' media. Not surprisingly, the credibility of the U.S. media among those with the willingness and the ability to be objective has fallen to the lowest levels in recent history. What is surprising, however, is the support these sections have received from a leading icon of the U.S. media. In the last week of April, Ted Turner, the founder of Cable News Network (CNN), reportedly declared that Rupert Murdoch had helped start the U.S. war against Iraq by using his newspapers and television stations to advocate such a war. It is indeed true that the New York Post controlled by Murdoch aggressively advocated the war in Iraq and described the group of countries opposing it as the "Axis of Weasel". It is also true that Bill O'Reilly, a political commentator in Murdoch's News Corp-controlled Fox News television, called for a boycott of French products in protest against France's opposition to the war. But what makes Murdoch's behavior different from that of Turner's, who as Vice-Chairman of AOL Time Warner oversaw the operations of CNN during the Iraq war and continues to do so till May, when he steps down as part of an internal reshuffle? CNN and its sister companies could hardly be cited as examples of news outlets that were critical either of the Bush administration's decision to go to war or of the way the war was conducted. Turner's candor went far enough to provide an answer to these questions. Speaking at a Commonwealth Club of California event in San Francisco, he explained News Corp's advocacy of war in terms of Murdoch's desire for profit. Murdoch promoted the war, he is said to have argued, "because it's good for his newspapers and good for his television stations". The cynical race for readership and viewer ship rather than belief, Turner seems to suggest, motivated News Corp's reportage. And he does seem to have won. Fox News' strategies have ensured that it has a larger audience than competing networks, including CNN, CNBC and MSNBC. Ted Turner is clearly not convinced that the war was necessary and wants proof that Iraq had the weapons of mass destruction that provided the Bush administration with its justification of the war. "I want to see the proof," Turner is reported to have said, "I want to see what we went to war for." This implies that, despite the views he now espouses, CNN adopted the stance it did either because of the fact that he is not in control or because of the competition from Fox News and other channels. Turner possibly thinks it is a bit of both. He admitted that he was soon stepping down as AOL Time Warner Vice-Chairman overseeing CNN and other networks because he had been "fired". So the network must have been slipping out of his control. But he went on to say that the U.S. media was too concentrated, and that the big five groups in the broadcasting business (News Corp/Fox, AOL Time Warner/CNN, Disney Co/ABC, Viacom/CBS and General Electric/NBC), which control 99 per cent of what Americans see and hear, "don't have the public's interest at heart". Turner is reported to have rued the fact "that the media is too concentrated... Too few people control too much, especially considering that I'm not one of them." This candid statement of the connection between media power, the search for profit and events such as war from a leading insider, supports much of what critical commentators such as Ben Bagdikian, Noam Chomsky, Edward Herman and Robert McChesney have been arguing for quite some time now. Writing in 1997, Bagdikian pointed to the fact that over the previous five years, a small number of private corporations had acquired unprecedented control over public communications power, including the news. This was disturbing since many of these entities were the prime or sole source of information to a section of the American public. In support, he noted: "Of the 1,500 daily newspapers in the country, 99 per cent are the only daily in their cities. Of the 11,800 cable systems, all but a handful are monopolies in their cities." A few corporations were acquiring a number of these and that trend, he argued, would accelerate in the aftermath of the passage of the Telecommunications Act of 1996, which liberalised rules regarding mergers and acquisitions. "At issue is not just a financial statistic," he warned. "At issue is the possession of power to surround almost every man, woman and child in the country with controlled images and words, to socialise each new generation of Americans, to alter the political agenda of the country." Turner has merely speculated on one consequence of that prediction, which has meant mass murder and devastation for the people of Iraq. The danger now is that this power of a few media corporations is likely to increase. On June 2 this year, the U.S. Federal Communications Commission (FCC), chaired coincidentally by Michael Powell son of U.S. Secretary of State Colin Powell, is to meet to vote on a report that is expected to recommend far-reaching liberalisation of even the existing diluted regulation of the media. The report being prepared by Ken Ferree, the director of the media bureau of the FCC, is the result of a biennial review of media laws mandated by the 1996 Act. Powell, who took charge of the FCC in January 2001, is known to be committed to relaxing controls on telecom and media ownership and favourably disposed to the big media corporations. His problem is that the FCC has four Commissioners, besides himself, two of whom are Democrats and two are Republicans. Thus, with the two Democrats (Michael Copps and Jonathan Adelstein) ranged against his proposals, he needs the support of the two Republican Commissioners to change the law as well of the courts that are the ultimate arbiters of telecom and media rules. In February this year, he attempted to push through measures that would help reduce burdensome competition between local Baby Bell telecom operators. He failed, however, because Kevin Martin, one of the Republican Commissioners, chose to oppose the move even at the cost of being dubbed by some as a Republican renegade. Deregulation of the media is even more controversial, since there has been strong opposition to some of the changes being advocated from unions, trade associations, consumer activists, think-tanks and academicians, who understandably fear that these would only increase the power of the media barons to manipulate public debate. The regulations currently in place that are being reviewed include the following: The TV-Radio Cross-ownership Rule, prohibiting one party from owning a television and radio station in the same market, although entities in the 50 largest media markets can obtain waivers. The Dual-Network Rule, which prohibits one broadcast network from owning another. The Local Television Ownership Rule, prohibiting one party from owning, operating or controlling two or more broadcast television stations, unless one is ranked below the top four. The National Television Ownership Rule, in which no single owner can reach more than 35 per cent of television households, nationally. The Broadcast-Newspaper Ownership Rule, prohibiting broadcasters from owning a daily newspaper and broadcast outlets in the same city. The Local Radio Ownership Rule which allows one entity to own only up to eight commercial radio stations. It should be obvious that given the past record of the big media players in the U.S., relaxing one or more of these regulations would set off a merger-and-acquisition wave that would concentrate power over the media even further. The opposition to deregulation is based on the twin dangers of lack of diversity and media manipulation. Common ownership can result in the same selectively chosen information and the same opinions being purveyed by different media outlets. That this does happen was acknowledged as far back as 1978 even by the U.S. Supreme Court which in FCC vs National Citizens Committee for Broadcasting, argued: "It is unrealistic to expect true diversity from a commonly owned station-newspaper combination. The divergence of their viewpoints cannot be expected to be the same as if they were antagonistically run." If this lack of diversity is combined with an urge to manipulate the news, the effects would obviously be disastrous. Critics point to the results of the last experiment with relaxation of rules to defend this apprehension. The 1996 Telecommunications Act had partly liberalised rules allowing media companies to acquire as many television stations as they wanted so long as their reach does not exceed 35 per cent of U.S. households. The results were as expected. At the moment, CBS owns 21 stations; ABC 10; NBC 13; and Fox 33. That Act also singled out radio for massive ownership deregulation. Since the passing of the Act, Clear Channel Communications, the leading radio and concert conglomerate in the U.S., has expanded from 40 stations to 1,225 stations. The net result is that there has been a 34 per cent decline in the number of radio station owners, a 90 per cent rise in advertising rates, evidence from artists that they are "shackled by the anti-competitive practices of the conglomerates", and complaints of an increase in indecent broadcasts. As a result, even Michael Powell, who normally argues that media ownership rules do not reflect the realities of a modern media marketplace, had to admit before a Senate Commerce Committee hearing that he was "concerned about the concentration, particularly in radio". Despite the opposition and the evidence, it is more than likely that the FCC would approve major changes in rules in June, since the differences between Kevin Martin and Michael Powell are not too sharp. Martin is reported to have said: "The courts have been looking at our decision to keep these rules with increased suspicion. We need to recognise that there are new voices in the marketplace." Martin is reportedly also not averse to cross-ownership between newspaper and broadcast outfits, and only in favour of using a simple "diversity index" to decide on retaining such regulation in particular small markets. If in addition Martin is right about the attitude of the courts, deregulation is in the air. Going by Ted Turner's assessment, this means that the American public and the world at large just have to wait and watch for the next devastating adventure that an even more concentrated media would advocate.



© MACROSCAN 2003