Media Ownership & Diversity Protections
Fact Sheet #108-2-09
February 24, 2004
A free and diverse media is the foundation of American democracy. As the Supreme Court noted in 1945, "the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public." (Associated Press v U.S)
The public's right to receive information from diverse sources is in serious jeopardy. In June 2003, the Federal Communications Commission (FCC) eliminated most protections against media consolidation, despite an unprecedented two million letters urging the FCC to retain strong media ownership limits.
Under the FCC's new rules, one media company is permitted to own the local newspaper, two or three television stations, multiple radio stations, and the cable franchise in the same local market. The FCC increased the number of local television stations that one company can own to a national audience reach of 45 percent, up from 35 percent. The 108th Congress subsequently imposed a national audience cap of 39 percent. Viacom (CBS and UPN) and Fox currently hover around the 39 percent limit.
The FCC's new media ownership rules will unleash a wave of corporate acquisitions and mergers that will further threaten diversity, localism, and quality in news coverage. Comcast's bid for Disney, for example, would create a $120 billion media goliath with unprecedented power over what Americans watch in their homes, in the movie theaters, and on the Internet – and what they pay.
CWA supports strong protections against media concentration and abuse of market power by cable and other media companies. CWA opposes media mergers such as Comcast-Disney that would put the control of major media outlets in the hands of one company.
Media is Already Highly Concentrated
Five corporations dominate the U.S. media: Disney (ABC), AOL-Time Warner, Viacom (CBS and UPN), News Corp. (Fox and DirecTV), and General Electric (NBC). These companies own TV, radio, cable, and Internet networks, stations, and program production companies. Fox and AOL-Time Warner are also publishers.
Most metropolitan areas have only one monopoly newspaper owned by a newspaper chain. In most cities, the top four TV stations dominate the television market.
Vertically integrated cable companies have market power to control pricing and programming. Cable prices have skyrocketed at three times the rate of inflation since 1993. Cable companies own 96 percent of the top 26 channels, and 86 percent of "must have" regional sports programming.
The largest cable system, Comcast, serves 21 million cable customers, one-third of all U.S. households. If Comcast buys Disney, it would bring together the nation's largest video distribution company with the largest provider of video content; the fourth-largest broadcast network (ABC), the owner of nine TV stations and 53 radio stations; the owner of multiple cable networks including ESPN and the Disney Channel; the owner of several sports franchises, and the nation's largest high-speed Internet provider.
Media Ownership Limits are Necessary to
Preserve Diversity, Localism, and Quality News Coverage
The poster child of media deregulation is radio. The Telecommunications Act of 1966 drastically reduced radio ownership limits; as a result, monopolistic Clear Channel now owns over 1,200 radio stations, even as the number of independent radio owners declined by one-third and radio ad rates increased 68 percent.
The Project for Excellence in Journalism and others have documented that growing consolidation in the news business has led to a serious decline in the quality of local news as distant corporate media executives demand cuts in news budgets to boost profits. With this decline, media employees see their fight for better economic conditions and professional standards stifled in the face of very more powerful media giants.
In the news and information business, competition and diversity help preserve localism in news coverage, enhance the quality and comprehensiveness of news content, assure a multiplicity of voices from a variety of independent sources, and reduce the risk that news will be censored or slanted by a few controlling interests. Maintaining competition and diversity is central to protecting the public's right to information and, importantly, to expanding the public's informed participation in our democracy.
House and Senate Legislative Action
Public uproar over the FCC's June 2, 2003 relaxation of media ownership limits led to immediate action in the last Congress. Congress rolled back the national audience cap to 39 percent. The Senate passed S.J. Res. 17, a Resolution of Disapproval introduced by Bryon Dorgan (D-ND) to reverse or rescind all of the FCC rule changes. Senator Dorgan's strategy involves a seldom-used legislative procedure called the Congressional Review Act. The procedure is used specifically to reverse federal regulatory actions. This was the first successful attempt by the full Senate to roll back FCC rule changes. The bill currently sits on the House Speaker's Desk. CWA supports S.J. Res. 17 and urges House passage of this bill.
Also in the Senate, CWA supports S. 1046, the Preservation of Localism, Program Diversity, and Competition in Television Broadcast Service Act of 2003 introduced by Senators Ted Stevens (R-AK) and Fritz Hollings (D-SC). This bill was introduced in the first session of the 108th Congress and now awaits floor action. S. 1046 would restore the national audience cap to 35 percent, restore the ban on the newspaper-broadcast cross-ownership, and force divestiture by radio station groups owning properties in excess of newly defined FCC radio markets.
CWA remains committed to congressional designed action to restore pre-June 2, 2003 media ownership rules. Of particular concern to CWA members in the newspaper and broadcast industries is restoration of the newspaper-broadcast cross-ownership ban and the prohibition against owning more than one television station in all but the largest markets. Since most Americans get their local news from the monopoly newspaper and one of a handful of local television newscasts, relaxing the rules against common ownership of newspapers and television stations in a local market would result in fewer diverse sources of local news, with serious repercussions for our democracy.
More recently, Representative Maurice Hinchey offered in the House Rules Committee, an amendment to H.R. 3717, the Broadcast Decency Enforcement Act of 2004. The amendment promoted a Government Accounting Office (GAO) study that would examine "the relationship between the horizontal and vertical consolidation of media companies and the number of complaints and violations of the indecency prohibitions contained in the statutes, regulations, and policies enforced by the Federal Communications Commission." The bill would also restore previous broadcast ownership rules made invalid by the actions of the FCC on June 2, 2003. The amendment would make invalid current FCC rules 30 days after the date of submission of the GAO report. The Rules Committee rejected the Hinchey amendment.
CWA expects that the media consolidation issue will remain in play for the duration of the second session of the 108th Congress. Republican and Democratic Members alike are keenly aware of the risks related to further consolidation. They continue to work together on this issue. As Democratic Leader of the United States Senate, Tom Daschle has vowed to keep the media ownership issue alive, clearly expressing his concerns about further concentration. In a speech delivered to the National Association of Broadcasters this month, Senator Daschle said, "This year, we intend to revisit the question of media ownership." "The trend toward even higher concentration of media ownership is a clear case in which the interests of big media conglomerates directly contradict the interest of our nation as a whole." He makes it clear that the airwaves belong to the public and goes on to say, "When Americans feel as though they are being excluded from this discourse because of its tone or content, that public space is eroded, and the connections our nation is built upon suffer." By working with Congressional Members on both sides of the aisle, CWA remains committed to roll back the media ownership rules adopted last year by the FCC. Congress can successfully reverse the course taken by the FCC through continued strong bipartisan cooperation.
For more information, please contact:
Alfonso M. Pollard Legislative Representative
(T) 202-434-1315
apollard@cwa-union.org
www.cwa-governmentaffairs.org
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