FCC Rule Change Term Paper

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FCC's recent rule changes regarding broadcast ownership in the United States. Specifically, it will discuss the FCC rule changes, and explain what is involved, the arguments on both sides of the issue, and the relative relationship and authority between the FCC and congress in this dispute. The FCC's new rule changes were initially mandated by the Telecommunications Act of 1996, and have created a storm of controversy since they were announced in June 2003. Congress intervened in the ruling, and the President has vowed to veto any bill Congress passes to repeal the rules. The controversy continues, but is it really necessary? Are the FCC rules really so bad, and do they spell the end of free enterprise in the media? Many people support the rules, and feel they will bring more choice to the American media. The results remain to be seen, however, whatever happens, the new FCC rules have certainly aroused the passions of those who both support and decry these rule changes.

The Controversy over FCC Rule Changes

The Federal Communications Commission (FCC) recently issued new rules regarding broadcast ownership in America today, and the rules have generated great controversy since they were announced. Basically, the "FCC's rules make it easier for media corporations to buy more newspapers and television stations but tighten radio ownership rules" (Ahrens). Many critics of the new rules believe that allowing huge media corporations to buy even more newspapers and television stations would not only create a monopoly on the media in many areas, it would create a large lack of independent thought in the news and media. With a few large media corporations controlling essentially all of the media in many areas, free thought and expression would be replaced with a corporate spin on all the news available in the area. Before the FCC passed the new rules, millions of Americans voiced their displeasure over the new rules by writing letters and sending petitions to Washington, however, the FCC chose to ignore the pleas of the citizens, and OK'd the new rules in spite of the growing voice against them. In an unusual move, the Senate voted to overthrow the rules, "employing a little used legislative tool for overturning agency regulations" (Ahrens). The Senate's vote, spearheaded by Senator Byron L. Dorgan of North Dakota, reflected the voices of many of their constituents, who made many arguments against the rules before the FCC put them into effect.

Why are the new rules so controversial? Many people believe that the new rules, which allow a newspaper to buy a television station in the same city or vice versa, combinations known as "cross-ownership." Also, the new rules let a broadcast network, such as ABC and Fox, own a group of stations that reach up to 45% of the national audience, up from 35%, the current "national cap." They allow one media company to own more than one station in many cities. Finally, the new rules tighten radio ownership rules, essentially capping national radio consolidation. This rule would be overturned by Dorgan's resolution as well, allowing radio conglomerates to grow bigger (Ahrens).

In areas where one large media conglomerate owns several stations in one city, the resulting coverage could become a melting pot of media views, with each station closely resembling its sisters, and the resulting coverage would also be indistinguishable from one station to the next. In fact, some large media corporations already employ a technique known as "Central Casting," where most of the operations for all the stations, including accounting, programming, graphics, and technical operations take place in one central location, with only a skeleton crew operating remote stations in other cities (White). Therefore, multiple stations in the same viewing area could take on a common look, feel, and design, and turn into "McDonald-like" clones of each other. As one critic notes, "Some cities will even have the same newscasts running on two different stations in the same market, with the same edited stories, same graphics, same anchors and same production crews for both stations. The only difference will be the "bug" graphic sitting on the screen the whole time" (White). It could be almost impossible for the home viewer to discern what station they were watching, because they would all look alike.

In addition, these conglomerates would also command the advertising market in their areas, and could conceivably create and hold prices at inflated levels, since there might be no alternative for advertisers. This could not only harm the small advertiser who uses television or radio as their primary advertising medium, it could ultimately lead to less advertising revenue for the media conglomerates as rising rates weed out advertisers who cannot pay the inflated rates.

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This could conceivably affect business and income in smaller communities.

Some groups also feel the new rules are a step against diversity and minority ownership of the media, and a step against free speech. If more conglomerates own more stations, the ability for small owners diminishes, and so, their voices will not be heard. Since women and other minorities own so few stations today, the opportunities for more minorities to own stations and broadcast their viewpoints can only diminish as bigger companies jump to pick up more stations. Therefore, free speech is threatened because the small voices will not be heard - they will be drowned out by the larger voices of the conglomerates and their Central Casting clones.

While the new rules have generated a great deal of controversy and public outcry, not everyone finds the new FCC rules offensive, or sees the need to repeal them. "The new FCC rules were championed by FCC Chairman Michael K. Powell, who argued that consolidation was less a threat now than when the rules were enacted because consumers have many more choices for their news and entertainment" (Ahrens). There are many who agree with Powell, and find the new rules a necessary part of the media business in the 21st century. In fact, one writer feels that part of the reason there is so much controversy surrounding the new rules is because they would allow smaller media corporations, such as Fox and Clear Channel to become bigger players in the national market, and that the media giants such as ABC do not want to face more competition. He writes,

It's no mere coincidence that two of the companies handcuffed by the current caps are Fox Television and Clear Channel, America's largest owner of radio stations. Fox, with its refreshing lack of a leftist bias, has been gobbling up market share from the big three networks and CNN. Clear Channel, which operates approximately 1,200 radio stations nationwide, has ruffled some "mainstream" media feathers with the pro-war slant and conservative disposition of many of its on-air personalities ("Broadcast deregulation needed" A18).

Many proponents of the legislation also decry interference by the government in FCC business, and feel the Federal Government has far too much power already, and that government should stop meddling in the media. In addition, it was Congress that mandated the FCC must review its rules every two years, and so, the FCC did a comprehensive review after the 1996 Communications Act was passed, and came up with what they felt were necessary changes. As the FCC notes in their own press release regarding the new rules,

In the 1996 Telecommunications Act, Congress mandated that the FCC review its broadcast ownership rules every two years to determine "whether any of such rules are necessary in the public interest as a result of competition." The Act requires the FCC to repeal or modify any regulation it determines to be no longer in the public interest. The FCC's decision today found that all of the broadcast ownership rules continue to serve the public interest either in their current form or in a modified form (FCC 1).

The FCC feels the new rules will encourage competition and will in the end create more broadcast choices for Americans. Today, Americans already have more choices than even a decade ago in the media fed into their homes. Cable channels and satellite networks bring a much wider variety of programming into American homes, and as a result, local stations are often feeling the pinch of competition. "The FCC found that pro-competitive ownership limits must account for the fact that broadcast TV revenue relies exclusively on advertising; whereas cable and satellite TV service have both advertising and subscription revenue streams" (FCC 2).

The FCC rules also do not apply to the smallest markets in America, where there may be three or less local stations. The FCC created a "Diversity Index" to make sure there is viewpoint diversity in each local marketplace, and so, the ownership rules would only apply in cities and markets where there are enough local stations to maintain diversity (FCC 7). Therefore, the argument by many critics that the new rules will result in one media voice for an area is unfounded, as the FCC has taken market size and….....

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