The Media Ownership Debate: Who Are the Real Media Masters?

June 16, 2003 • TechKnowledge No. 51

Despite the First Amendment prohibition on restricting private speech, arbitrary caps and quotas have long governed how many newspapers and radio and TV stations a given company can own. On June 2, the Federal Communications Commission slightly loosened those restrictions, unleashing hysteria from opponents who believe our thoughts are being programmed by a handful of media barons. But such conspiratorial “puppet‐​master” theories of media manipulation are misplaced. The real media masters in America are the viewers and listeners who demand and receive an ever‐​broadening array of information and entertainment choices.

Despite claims about the death of diversity, localism, and democracy, what proponents of ownership rules really advocate is their own version of media control and, ultimately, control of content and information. One cannot claim to support democracy and choice and simultaneously support centralized governmental control of the size or nature of private media outlets. Moreover, information is not “monopolizable” in a free society, where government does not practice censorship, and thus there is no such thing as a “media monopoly” unanswerable to the rest of society and the economy potentially arrayed against it. Government’s energy is best directed at its own regulatory policies that artificially generate scarcity of bandwidth and spectrum, which can and do stand in the way of new voices.

Misplaced Fears of Media Monopoly. Considering the dismal state of media competition and diversity just 20 to 30 years ago, today’s world is characterized by information abundance, not scarcity. Today the media are far less concentrated and more competitive than 30 years ago. Consider two families, living in 1973 versus 2003, and their available media and entertainment options. The 1973 family could flip through three major network television stations or tune in to a PBS station or a UHF channel or two. By comparison, today’s families can take advantage of a 500‐​plus channel universe of cable and satellite‐​delivered options, order movies on demand, and check out a variety of specialized news, sports, or entertainment programming‐​in addition to those same three networks.

Today’s family also has far more to choose from on the radio. Seven thousand stations existed in 1970 nationwide. Today more than 13,000 stations exist and subscription‐​based music services are delivered uninterrupted nationwide via digital satellite. And then, of course, there’s the Internet and the cornucopia of communications, information, and entertainment services the Web offers. Today, the Internet gives every man, woman, and child the ability to be a one‐​person publishing house or broadcasting station and to communicate with the entire planet or break news of their own. (Consider the “The Drudge Report” and its role in leaking the Clinton‐​Lewinsky scandal.) Today, the library comes to us as the Net places a world of information at our fingertips. And while the 1973 family could read the local newspaper together, today’s families can view thousands of newspapers from communities across the planet.

Timid Tweaking of the Rules. While America’s mass media marketplace is evolving rapidly, the same cannot be said for the rules governing it. Despite the uproar, the FCC’s June 2 ruling represented a meager liberalization effort. The national television ownership cap, which limits how much of the national market can be served by broadcast and cable companies, was bumped from 35 up to 45 percent. Likewise, the restrictions on radio and television cross‐​ownership in a single market, and on ownership of more than one of the top four stations in given market, have been moderately revised. Significantly, rules preventing a company from owning a newspaper and television station in the same market were largely lifted. But other rules remain. For example, the Dual Network rule banning mergers between the big broadcast networks (ABC, CBS, NBC and Fox) was preserved. A limitation on the number of radio stations a company can own in a local market was even tightened. Media companies continue to be forced to play by a restrictive set of ownership rules that are imposed on no other industry.

In revising such rules previously, the courts have recognized that the changes in the media marketplace have given citizens a diversity of news, information, and entertainment options that undercuts the rationale behind many of the current regulations. Moreover, the courts have stressed that the First Amendment remains of paramount importance when considering such restrictions of media. Forcibly limiting the size of the soapbox that media owners hope to build to speak to the American people is violates the free speech rights we hold sacred. The interesting question now is whether the courts will accept the FCC’s incremental changes to the existing rules, and how Congress will respond. Hearings are already being scheduled and bills introduced that would roll back the FCC’s limited liberalization efforts.

But it would be foolish for Congress to do so. Far from living in a world of “information scarcity” that some fear, we now live in a world of information overload. The number of information and entertainment options at our disposal has almost become overwhelming, and many of us struggle to filter and manage all the information we can choose from in an average day. FCC Commissioner Kathleen Abernathy put it well: “Democracy and civic discourse were not dead in America when there were only three to four stations in most markets in the 1960s and 1970s, and they will surely not be dead in this century when there are, at a minimum, four to six independent broadcasters in most markets, plus hundreds of cable channels and unlimited Internet voices.”

Given these market realities and a greater appreciation for the First Amendment rights of media companies, the courts may strike down any attempt to reinstate or strengthen the old rules. Congress would be wise to instead focus its energies on revising cumbersome spectrum policies that artificially limit greater innovation and competition to existing media companies.

Big Media or Big Government? Media monopoly is not a legitimate threat in a free society because citizens are always free to establish new media outlets, and investors are free to fund them. The scale and scope of private media organizations is not an appropriate target of coercive public policy, because such policy violates free speech. Government restrictions on ownership are themselves censorship and represent the real threat to democracy. Diversity, independence of voice and democracy do not spring from government control of the means of speech, but from a separation between government and media. Information‐​which at bottom, is what the debate is all about‐​is fundamentally not capable of being monopolized by private actors. Information is abundant and constantly being created. Only government can censor or prohibit free speech, or the emergence and funding of alternative views. Citizens need not fear media monopoly, rather, in our modern marketplace, it is the media itself that must live in fear of the power of consumer choice and the tyranny of the remote control.

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