FCC commissioner: Deregulation promotes big media breakups

As the FCC considers a plan being devised by its chairman to offer channels 'a la carte' in an effort to promote diversity, opponents in and outside the Commission are arguing it should leave big media alone.

The opposition is growing to US Federal Communications Commission Chairman Kevin Martin's proposal to invoke a clause in the Cable Communications Act of 1984 to open up cable TV channels to consumer choice. Chairman Martin's aim would be to ensure a more diverse programming lineup is available to customers, rather than the usual slate of basic channels that CATV services typically select for them.

Already, 26 House Republicans including former Commerce Committee chair Joe Barton (R - Texas) and former House Speaker Dennis Hastert (R - Ill.) have reportedly signed onto a letter to the FCC questioning his conclusions about whether 70% of the US' television viewing public have access to cable television. Martin cited that statistic as having been scientifically determined, though there are many other sources who say that number is far lower.

Martin's aim is to increase the possibility for program diversity, especially for what the government considers "minority viewers." But ironically, it may be those minority viewers who are less likely - especially in urban areas - to have access to cable TV, and whom studies such as Martin cites may have omitted from their calculations. So if more viewers actually need access to more diverse programming, the legal trigger might not be available to make that happen.

That irony was explicitly addressed yesterday by FCC Commissioner Robert McDowell, in a speech before the Media Institute in Washington.

"One of our [media] ownership studies...finds that women and people of color are clearly underrepresented in the radio, TV and newspaper industries - no surprise there, sadly," McDowell remarked. "But it also finds that this pattern holds across a broad sampling of industries at relatively similar rates, so that the radio, TV and newspaper businesses are not unique. The study also finds that access to capital is the primary cause of under-representation. Or, to quote Jack Kemp, 'you can't have capitalism without capital.' Accordingly, the study recommends several improvements to the FCC data collection process to track race and gender in ownership. Gathering better data could easily be fixed. Putting incentives in the right place so that it's in the economic interest of businesspeople to solve the access to capital problem? Not so simple."

If the FCC had a better understanding of the problem of media diversity, according to Comm. McDowell, it might be able to put together a more effective set of incentives for combating the problem. The trouble is, the tool it would then need to activate those incentives might be taken away from it, and kept away from it by the US Supreme Court, which McDowell believes helps keep the FCC in "a legal vice grip."

Another tool the FCC might consider, he suggested, are tax deferments for minority-owned media interests, to help them fund better and more diverse programming rather than settle for syndicating what's more readily available.

But McDowell then also suggested that legislators and the FCC should leave CATV well enough alone, because that industry is managing to find its own way and adopt its own standards of fairness and diversity without the government's help. In fact, he suggested, it has been deregulation all this time which has created a newfound spirit of divestiture among media conglomerates.

"The ironic truth is, in many cases, media consolidation has actually become media divestiture," McDowell said. "Companies such as Disney, Citadel, Clear Channel and Belo actually have been shedding properties to raise capital for new ventures. They are directing new capital investment toward new media ventures. That's where America's eyeballs are looking; so that means that's where the ad dollars are flowing. The Hollywood writers' strike is all about the concept of following the eyeballs and ad dollars. For instance, over one-third of Americans go online to get their news. That number is growing. Traditional media's numbers are shrinking."

McDowell did not cite authorities for his statistics, though inevitably and perhaps not so ironically after all, they will likely be called into question, too.