Media Consolidation Looms With New FCC Rules

W A S H I N G T O N, June 2, 2003 -- After Natalie Maines, lead singer of the Dixie Chicks, told a concert crowd, "We're ashamed the president of the United States is from Texas," angry listeners called local radio stations threatening boycotts if they didn't pull the group's songs.

Some individual stations complied, but others went far beyond local action. In fact, the nation's second-largest radio chain, Cumulus, banned the group from all of its country-western stations — 42 in all.

"It's only the tip of the iceberg of the kind of control that can happen if we permit more consolidation," said Donna Halper, a radio consultant.

Click here to read how critics fear further consolidation could affect you.

New FCC Rules?

Today, by a 3-2 vote along party lines, the Republican-controlled Federal Communications Commission approved rules that likely will allow large media companies to expand their reach over local television stations and newspapers.

Some critics — who include such unlikely bedfellows as the National Rifle Association and the National Organization for Women — complain the issue has received little national debate.

Networks currently are limited to owning only those TV stations that collectively reach 35 percent of the nation's viewing public or less but this reach would be increased to 45 percent coverage. The new regulations would permit more dual ownership of a newspaper and a television station in the same community.

In the most competitive markets, like New York or Los Angeles, the same company would be allowed to own up to three television stations.

FCC chairman Michael Powell, who wrote the proposal, said current limits on media ownership are outdated. FCC officials also have complained that current rules have been successful targets of lawsuits in recent years, and new laws are needed to maintain effective FCC control. In addition, they say, Congress has urged the FCC to regularly reevaluate and update its regulations.

"Many of these rules predate cable television," Powell said in an interview with Nightline. "Most all of them predate direct broadcast satellite television. All of them predate the Internet. Many of them predate the VCR. These rules have to be modified to reflect the media environment our children see, not the ones that our grandparents saw. And I think that's one of their vulnerabilities."

The Old Days

Long ago, the initials FCC made broadcasters tremble, because the FCC had the power to issue — and on rare occasions even revoke — broadcast licenses. The underlying assumption was that since the airwaves belonged to the public, the government had the right to regulate broadcasting, to insist on certain minimal standards.

The networks — just ABC, CBS and NBC, at one time — were severely restricted as to the number of radio and television stations they could own.

Broadcasters were obliged to operate in what was called the "public's interest, convenience, and necessity." Simply put, that meant that in exchange for the right to make bundles of money by selling advertising over the public airwaves, broadcasters had a responsibility to provide a certain amount of news, cultural and children's programming, and to present a balanced view of controversial issues.

During the Reagan administration, when deregulation of industry came into fashion, when cable and satellite television began to provide alternatives to over-the-air broadcasting, regulations were eased.

‘Clear Channel-ization’ and Public Safety

Seven years ago, radio consolidation accelerated when the FCC eased limits on radio ownership, much like they're talking about doing now with television. Today, there are 30 percent fewer radio station owners. They've been replaced by big conglomerates like Clear Channel Communications. With the government green light, Clear Channel grew from 43 stations to nearly 1,200.

"I think the Clear Channel-ization of the rest of our media, television, would probably not be a boon for the American citizen," said Michael Copps, an FCC commissioner opposed to the proposed changes.

Critics point to what happened in Minot, N.D. There are seven commercial radio stations in town — six owned by Clear Channel.

In January 2002, a freight train derailed in the middle of the night, spreading a toxic ammonia cloud and fear over the town. Power was knocked out. Most residents turned to their radios for guidance.

As the cloud enveloped her home, Jennifer Johnson huddled in the basement, searching her radio dial, hearing only music.

"I didn't know what was happening," Johnson said. "I thought somebody should be able to tell us what's going on. And hours passed and they still didn't know what was going on."

One of the Clear Channel stations is the designated emergency broadcaster. But there was a problem with the police system designed to automatically send out the alert over the radio. So, police tried to contact the one Clear Channel employee on duty. No one answered the phone.

"As long as I can remember, [I] told people, 'When there's an emergency, turn your radio on; the information will be there,'" Minot Police Lt. Fred DeBowey said.

It wasn't.

"It's so important that the people feel the confidence in their media because the media is part of public safety," DeBowey said. "It's no different than an ambulance, fire truck, law enforcement."

Clear Channel and police both say the technical and communications problems in Minot have been fixed.

Big Media

There are lots of media outlets — hundreds of cable and satellite channels, four major broadcast networks, Internet access to news from around the world. But those numbers are deceiving. Seventy percent of the news, information, and programming viewers see on television comes from just a handful of media giants, including Disney, which owns ABC.

To understand the reach of these companies, take Viacom Inc. It owns the CBS network, 39 local TV stations, more than 180 radio stations, MTV, Nickelodeon, Showtime, Paramount Pictures and more. Critics say under the new rules there will only be more consolidation, and fewer companies controlling more of what we see and hear.

"I'm very concerned, because independence of communications is fundamental to democracy," said Howard Rosenberg, media critic for The Los Angeles Times. "And when you channel more and more communications into fewer and fewer hands, that's extremely dangerous."

‘Celebration of Bigness’ in L.A.

Rosenberg says he's already seen the future, in Los Angeles. There, three of the networks already own at least two TV stations each. On the Viacom stations, you can watch the same news reporter on the same night, on two different channels — and the same investigative reporter, and the same weather man. Also in Los Angeles, The Tribune Company owns both The Los Angeles Times newspaper and local television station KTLA.

Every night on the 10 o'clock news, the television news reports on what the newspaper is reporting on the next day.

"It's a celebration of bigness at the expense of the public," Rosenberg said.

The concern that bigger companies will focus more on the bottom line than the public good. Remember radio giant Clear Channel? Their CEO, Lowry Mays, told Fortune magazine: "We're not in the business of providing news and information. We're not in the business of providing well-researched music. We're simply in the business of selling our customers products."

"There's nothing in it for the owners to provide diversity of voices and localism and competition," said Martin Kaplan, of the University of Southern California's Annenberg School. "What's in it for those big owners is only one thing — profit."

ABCNEWS' Lisa Stark, Ted Koppel and Michael S. James contributed to this report.