TechKnowledge No. 85

Media Ownership Regulation Redux: A Reality Check

By Adam D. Thierer
June 30, 2004

Last week, the Third Circuit Court of Appeals threw out most of the FCC’s new media ownership rules, arguing that the agency had not done a sufficient job justifying a relaxation of existing regulatory constraints. This claim seemed strange given the voluminous record the FCC created to justify its new rules, which included not only its final 250-page rulemaking, but a dozen “Media Ownership Working Group” studies, which provided extensive empirical support for relaxation of the rules.

But that wasn’t good enough for the Third Circuit, and now the court will apparently act as a de facto review board for future FCC media ownership decisions. This will leave media law in this country “in a clouded and confused state” as FCC chairman Michael Powell noted in the wake of the decision. Worse yet, this decision turns back the clock on mass media regulation in America and pretends that nothing has changed in recent decades to justify a relaxation of the rules that bind the media sector.

There’s no need to go into a long-winded dissertation about just how wrong-headed this thinking is when the facts do the talking so nicely on their own. Media critics have repeatedly shown their preference to use emotionalism, hyperbolic rhetoric, and shameless fear-mongering to make their case for extensive media ownership regulation. But a dispassionate review of the facts about modern media makes it clear that to the extent there has ever been a “Golden Age” of media in America, we are living in it today. The following facts are taken from a forthcoming Cato Institute book Media Myths: Making Sense of the Debate over Media Ownership Regulation:

General Media Facts or Trends:

  • “A weekday edition of the New York Times contains more information than the average person was likely to come across in a lifetime in seventeenth-century England,” claims Information Anxiety author Richard Saul Wurman. A 1987 report entitled Information Skills for an Information Society found that more new information had been produced within the last 30 years than in the last 5000.
  • According to Ben Bagdikian, a leading critic of media deregulation, there are 37,000 different media outlets in America. That number jumps to 54,000 if all weeklies, semiweeklies, advertising weeklies, and periodicals are included, and to 178,000 if all “information industries” are included. And yet the title of Bagdikian’s most recent book is The New Media Monopoly.
  • Investment banker Veronis Suhler Stevenson reports that by 2007 the average American will spend 3,874 hours per year using major consumer media, an increase of 792 hours per year from the 3,082 hours per year that the average person spent using consumer media in 1977.
  • According to various sources, as of 2003 household penetration rates for various media and communications technologies were very high: VCR-88 percent; DVD-50 percent; DBS-24 percent; cell phones-70 percent; personal computers-66 percent; and Internet access-75 percent. With the exception of VCRs, none of these technologies were in American homes in 1980.
  • According to Plunkett’s Entertainment & Media Industry Almanac, in 2002, the average consumer spent $212 for basic cable, $100 for books, $110 for home videos, $71 for music recordings, $58 for daily newspapers, $45 for magazines, $45 for online Internet services, and $36 on movies.
  • A three-minute coast-to-coast long-distance phone call which cost roughly $1.35 in 1970 cost only15 cents in 2003, according to W. Michael Cox, chief economist of the Federal Reserve Bank of Dallas.

Television / Video Competition:

  • The FCC has found that 88 percent of Americans now subscribe to cable and satellite “pay TV” sources even though “free, over-the-air” television remains at their disposal.
  • The FCC notes: “In 1979, the vast majority of households had six or fewer local television stations to choose from, three of which were typically affiliated with a broadcast network. Today the average U.S. household receives seven broadcast television networks and an average of 102 channels per home.”
  • There are more than 308 satellite-delivered national nonbroadcast television networks available for carriage over cable, DBS, and other systems today. The FCC concludes, “We are moving to a system served by literally hundreds of networks serving all conceivable interests.”

Magazines:

  • According to the Magazine Publishers of America , there were 17,321 magazines produced in 2002, up from 14,870 in 1992. As the MPA’s annual Magazine Handbook notes, “For virtually every human interest, there is a magazine.”
  • There were 949 new magazine launches in 2003, up from 289 new launches in 2002, according to Samir Husni’s Guide to New Magazines.

Newspapers:

  • In 1900 the average newspaper had only 8 pages according to Benjamin Compaine of MIT. In the year 2000, by contrast, according to the Encarta encyclopedia, “Daily general-circulation newspapers average[d] about 65 pages during the week and more than 200 pages in the weekend edition.”

Radio:

  • According to FCC data, the number of radio stations in America has roughly doubled since 1970. As of March 2004, there were 13,476 radio stations in America, up from 6,751 in January 1970.
  • Satellite radio (XM and Sirius), an industry that did not even exist before December 2001, today boasts more than two million subscribers nationwide according to company reports.

Internet / Online Services:

  • Seventy-two percent of Americans are now online and spend an average of nine hours weekly on the Internet according to the FCC.
  • Online search giant Google recently reported that its collection of 6 billion items includes “4.28 billion web pages, 880 million images, 845 million Usenet messages, and a growing collection of book-related information pages.”
  • The Internet Archive “Wayback Machine” (www.archive.org) offers 30 billion web pages archived from 1996 to the present. It contains approximately one pedabyte of data and is currently growing at a rate of 20 terabytes per month. The site notes: “This eclipses the amount of text contained in the world’s largest libraries, including the Library of Congress. If you tried to place the entire contents of the archive onto floppy disks … and laid them end to end, it would stretch from New York, past Los Angeles, and halfway to Hawaii.”

So, let us once again ask the question: Has nothing really changed in America’s media universe?

Adam Thierer (athierer [at] cato [dot] org) is the director of telecommunications studies at the Cato Institute in Washington, D.C. To subscribe, or see a list of all previous TechKnowledge articles, visit www.cato.org/tech/tk-index.html.