2 sides of media-ownership flap

One study fears 'disaster,' another calls rules 'pointless'

Easing the rules that generally bar a single company from owning a newspaper and broadcast outlet in a single local market would allow a handful of individuals to dominate news coverage in many U.S. communities, according to a new study by public interest groups.

The study by the Media and Democracy Coalition of communities in 12 states ranging from California to Maine found that eliminating the newspaper-broadcast restriction could allow one company to increase its market power beyond the limit antitrust authorities allow when they decide whether to permit mergers.

While consumer groups were calling on the commission to keep the so-called cross-ownership rules, the Media Institute, a media company-backed think tank, was urging the FCC to throw them out as "pointless."

According to the Media and Democracy Coalition study, authors applying the Herfindahl-Hirshman Index to media markets gives a truer picture of what happens when one company owns print and broadcast properties in the same market, and they say it isn't pretty.

"That is not a marketplace where ideas can develop and have antagonism," said Consumer Federation of America research director Mark Cooper, one of the authors. "That is a disaster for American democracy."

In Los Angeles, allowing "any cross-media merger involving the top newspaper and TV firms would increase concentration in excess of the Department of Justice/Federal Trade Commission merger guidelines," according to the study. The Tribune Co. already owns the Los Angeles Times and TV station KTLA under a temporary waiver of the cross-ownership rule.

Los Angeles is one of the largest and least-concentrated media markets in the country, but the study's authors contend that these results hold true across the country in Portland, Maine, where a purchase by one of the major outlets also would exceed merger guidelines.

"People need to understand that ownership matters," said Ben Scott, policy director at Freepress.net.

The Media and Democracy Coalition is made up of 25 public-interest organizations including the Consumer Federation, Center for Creative Voices in Media, Freepress and Consumer Federation of America. Nearly all of the groups opposed the FCC's moves to ease media-ownership restrictions three years ago, when the agency relaxed the decades-old rules, permitting companies to buy more television stations and own a newspaper and a broadcast outlet in the same city.

The Media Institute, which is backed by such companies as Viacom, News Corp. and Tribune, sees things differently and wants the rules eliminated.

"Media 'scarcity' by any definition has long since vanished, eliminating any need for the government to impose diversity," it said in comments filed with the FCC. "Policymakers who fail to grasp this essential truth and who continue to impose burdensome and even ruinous regulations on this one sector of the communications industry may be remembered for having turned our old media into relics of a bygone era."

Media companies contend that existing ownership rules were outmoded in a media landscape that has been altered substantially by cable TV, satellite broadcasts and the Internet. Adversaries say easing restrictions likely will lead to a wave of mergers, handing a few giant media companies control of what the public sees, hears and reads.

The federal appeals court in Philadelphia threw out the new regulations, saying the FCC hadn't done enough to prove that the changes were needed. One regulation that raised a single company's audience-reach ceiling to 45% of U.S. households, instead of 35%, was taken off the table when Congress set the audience-reach ceiling at 39% by statute. The commission restarted its review with a field hearing in Los Angeles this month.
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