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Is Chairman Powell on to Something?

Now that some of the furor over the recent FCC decision to relax media broadcast rules has subsided, I think that there are something interesting comments and opinions underlying the FCC’s decision. While I am no policy expert, I do think that this is a really interesting development worthy of some commentary.

At its highest level, the recent FCC decision relaxes the rules regarding broadcast media ownership, allowing entities to have a greater reach across media types in a given market.

After several readings of Chairman Powell’s comments on relaxing the rules of media ownership, I have come to the conclusion that he both 1) had a mandate to do something to liberalize ownership and 2) was politically astute enough to realize that if something wasn’t done now more drastic steps would be taken in the future. None of this, however, gives me any insight into whether he or any of the other FCC folks actually think that this is a good idea.

The basic argument goes something like this:
-Consumers have more outlets with the proliferation of cable, satellite, and the Internet.
-Proliferation produces a panopoly of choices and outlets for media for consumers to sample.
-Consequently, the old definitions of media ownership need to be relaxed to reflect this new world.

While I have no problem believing the veracity of statements 1 and 2, it is the conclusion that doesn’t sit well with me. Just because consumers have more outlets doesn’t mean that those outlets are being utilized. I, for example, still believe that my local newspaper and television providers do a better job of covering local topics than any cable or satellite-based provider. I don’t know many people who look to national broadcast media to find out what happened in their town. Also, as one FCC governor pointed out, many of the companies that own the traditional print, television, and radio outlets own siginificant assets in the new media space. Suggesting that the explosion of national media outlets has a direct impact on the diversity of opinions and outlets at the local level simply does not follow.

With that background in place, I would like to make three points:

This is more important for advertisers than consumers – What I find shocking is the relatively scarce amount of attention paid to what increasing consolidation means for advertisers. As media conglomerates lock up local media outlets, those looking to advertise will find themselves with limited opportunities for choice. I am a bit skeptical of those who have called this “the end of democracy as we know it.” For most issues of national import, consumers will still have opportunities to seek out balanced viewpoints from around the country.

The slient Clear Channel “monopoly” – There has been very little written about the radio giant known as Clear Channel (I don’t think that it is fair to call them a monopoly until someone brings and wins a lawsuit against the company). Wired has written a nice piece that summarizes some of the fallout associated with the laws that relaxed radio ownership. Clear Channels market power has certainly had an impact on those looking to use radio as an outlet for promotions or advertising — is there a strong reason to believe other forms of media are significantly different?

Politically pragmatic decision? – The language in Chairman Powell’s written and oral statements does not convince me that the relaxation of these rules is in the best interest of consumers. However, I do believe that the FCC must have been under tremendous pressure to do something to liberalize media ownership. Perhaps if Chairman Powell hadn’t acted in the way that he did, more drastic (and perhaps more damaging) new rules would have been enacted. If this was in fact a concession to stave off more sweeping reforms, I would be very interested to hear what the FCC has up its sleeve to right the ship.

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