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FCC Seeks Airwaves Trading System

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The Chicago Tribune won’t need the approval of the Federal Communications Commission to seal its purchase of the Los Angeles Times, but the deal does trigger federal rules that prohibit ownership of a broadcast station and daily newspaper in the same locale. [includes rush transcript]

The Tribune’s $6.3 billion acquisition of the Times would give it newspapers in cities where it already operates television stations. The FCC’s so-called “cross-ownership’’ rules ban such combinations in a market. According to agency rules, companies that break the ban must dispose of their broadcast station within one year or by the time their broadcast licenses come up for renewal–whichever is longer.

In the meantime, the FCC is looking at the ownership ban, as part of a broader review of its media rules. The agency is considering whether to eliminate it entirely, change it or keep it as is. The FCC is expected to complete its review sometime this year. The Newspaper Association of America has urged the FCC to quit enforcing the regulation or at least implement a waiver policy until it can be repealed.

Meanwhile, Rep. Billy Tauzin (R-La), chairman of the House Commerce Committee’s telecommunications panel, is pushing for legislation to curtail what he calls the FCC’s overbroad jurisdiction to determine whether merger deals serve the public interest.

This, as federal regulators signed off on the $46 billion merger of Qwest Communications and U. S. West on Friday. And in related news, the FCC is also looking at plans to treat airwaves as commodities to be bought and sold on the open market. A plan would encourage license holders that aren’t using all of their frequencies to post that availability on a Web site for other interested companies.


  • Jeff Chester, Center for Media Education, an electronic media advocacy group. Call: 301.270.3938.
  • Robert McChesney, Professor, Institute for Communications at the University of Illinois. He is the author of ??Rich Media, Poor Democracy: Communications Politics in Dubious Times.

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This is a rush transcript. Copy may not be in its final form.


The Tribune Company won’t need the approval of the Federal Communications Commission to seal its purchase of Times Mirror Company, but the deal does trigger federal rules that prohibit ownership of a broadcast station and daily newspaper in the same locale. Tribune Company’s $6.3 billion acquisition of Times Mirror would give its newspapers in cities where it already operates television stations.

The FCC’s so-called cross-ownership rules ban such combinations in a market. According to agency rules, companies that break the law must dispose of their broadcast station within one year or by the time their broadcast licenses come up for renewal, whichever is longer. In the meantime, the FCC is looking at the ownership ban as part of a broader review of its media rules. The agency is considering whether to eliminate it entirely, change it, or keep it as it is.

The FCC is expected to complete its review sometime this year. The Newspaper Association of America has urged the FCC to quit enforcing the regulation, or at least implement a waiver policy until it can be repealed. We’re going to talk about a number of these issues right now. One is the Los Angeles Times being takes over by, what, the Chicago Cubs?


Tribune, Tribune.


Which also owns the Chicago Cubs.


Which also owns the Cubs, among many other properties that it owns.


And we’re going to talk about the new FCC rulings. We’re joined by two people, Jeff Chester from the Center for Media Education, which is an electronic media advocacy organization in Washington, and Robert McChesney, who is a professor at the Institute for Communications at the University of Illinois. He’s the author of Rich Media, Poor Democracy. Welcome to Democracy Now!, Robert McChesney and Jeff Chester.

ROBERT McCHESNEY: Glad to be here.


Well, it’s good to have you both with us. Let us begin with Bob McChesney. Can you talk about the Los Angeles Times being taken over by the Chicago Tribune?

ROBERT McCHESNEY: Well, it follows, in one sense, the pattern in media industries, especially newspapers, the past three or four decades, where, you know, chain newspapers, it becomes the order of the day, and the larger the chain, the better, and the more powerful, the better. And generally the evidence shows that these do not have many benefits for anyone except the shareholders of those companies. There’s very little bits passed on to the public. In fact, to the extent there is hard evidence, it points that usually as these companies get bigger and bigger, the localism, the commitment to local news, tends to suffer.

But this deal is more than simply that, because — and I think Jeff will be able to talk about this, too —- this deal is really not just about newspaper companies, it’s about a company, the Tribune, which has a very advanced strategy, I think, with merging television, newspapers and the internet, and as a result, what this deal is going to do for the Tribune Company is give them the dominant newspaper in the second— and third-largest markets in the country and a very important newspaper, as you know, in New York in Newsday, which dominates Nassau County and has made attempts to get into the city. But it gives them the first three markets in the country with daily newspapers.

And, you know, a long time ago people were writing off, maybe not even a long time ago, writing off newspapers as an antiquated Gutenbergian technology, but now I think that the lesson of the internet is that the traditional media giants have enormous resources that can’t be duplicated as things go online. And daily newspapers have tremendous resources and assets that they’ll be able to bring to the internet, and I think they’re positioning themselves now to make more deals, get bigger and bigger in the coming years.


Well, I’d like to ask Jeff Chester about this, because I’m very familiar with the Tribune Company. They used to own the New York Daily News, where I’ve worked for many years, and in fact I thought that back in ’90, ’91, when we had a six-month strike that actually drove Tribune out of New York City, the newsprint business, that we’d seen the last of them, but I guess they’re back in New York.

But one of the interesting things on this whole issue is the question of this joint ownership of both TV and print, and how Tribune has been developing that in Chicago, where basically it’s using the Chicago Tribune reporters to also do TV work, radio work, all of it, of course, without more compensation to them for doing this, and basically using the resources of their print reporters to establish more of a critical mass, I guess, of information.

And the term that they’ve developed for their journalists, which is called “content providers,” rather than journalists, and of course in New York they’re talking about now WPIX, which is a Tribune-owned company, a TV station, being able to do joint ventures with Newsday, and in Los Angeles KTLA being able to do joint news operations with the L.A. Times.

Are there any ethical questions that are raised by all of this? And what about this issue of the ban on cross-ownership, which, after Murdoch bought some of the Fox stations, he got a dispensation actually from this, and most people feel that this is the trend now?


Look, you’re going to see more and more of these mergers. You’re going to see more and more of this cross-ownership, more and more lobbying for this cross-ownership, and more and more of the entire media industries being much more commercial, influenced by the role of advertising and marketing. And it’s going to be — whether it’s newspapers or on the internet or on television, they’re all going to merge, and that’s what’s driving these deals. This is an attempt by the largest companies in the world — but let’s just look at the US — to control all the major outlets. Their model is simply, bottom line, let’s make as much money as possible.

This trend, unfortunately, is going to continue, and I think that the challenge that people concerned about diversity of information sources, the potential for independent journalism, media that promotes arts and culture both locally and nationally, is to take advantage of the fact that we have a new system coming in. All these deals are being driven by something called broadband, which is the merging, the convergence of all these media through either cable wires or telephone wires or over the air, to create a whole new media system that creates some new spaces. I don’t think we’re going to change these trends, even though we have to fight them.

Now, in terms of cross-ownership, the newspaper industry has been fighting for years to repeal the very important safeguard that now prevents a newspaper in a community from also owning the local station, and my organization was involved, for example, in 1996, forcing the Republicans to take that provision out of the Telecom Act, which is why it’s now at the FCC. They wanted to do it in ’96, but we were able to stop them then.

Hopefully we’re going to be able to stop them now. But sooner or later, in part because people don’t pay attention to the politics of media, don’t see media as important as environment and healthcare, even though it’s the media that gives us our imagination, our framework for consciousness, there’s very little support for these public interest policies in a hugely corrupt system.

So, you’re going to see — you know, journalists are simply peons of these big companies, and as someone who lived in Los Angeles, that lived in California, I really do mourn what is about to happen to the Los Angeles Times. It wasn’t perfect, but they put resources into the news, they did fantastic investigative reporting, they have a wonderful TV criticism, you know, journalism criticism, and I think you’re going to see that stopped, slowly but surely, by the cost-cutting, you know, folks at the Chicago Tribune, who really don’t put out a newspaper that someone should be proud of.

And just quickly, I just want to say, you know, over the years in campaigning for public interest media issues, we’ve been able to count on the Los Angeles Times editorial support, in part because they didn’t own TV stations. They sold their sort of other media properties, and they tried to look at this just as a newspaper company, and they were very, very fair.

Now that they’re part again of this sort of larger converged environment, I don’t think you can expect the Los Angeles Times to do what it did, for example, last year, recommend that television stations have to provide some kind of public interest responsibilities in return for the $70 billion worth of digital spectrum they got from the public.


I wanted to ask about this other development, as well, the FCC promoting a trading system to sell the airwaves. As they, the New York Times puts it: “The airwaves grow ever more congested with modern wireless communications. The federal government is developing plans to open up the spectrum by, in effect, treating its frequencies as commodities to be bought and sold as routinely as pork bellies or soybeans in the open market.” Jeff Chester, what’s that all about?


Well, this continues the trend that we’ve seen for a number of years, and which goes back historically, which Professor McChesney is the country’s leading expert in how the public interest had never meant anything, for the most part, except how the owners of the media can make a dollar. But interestingly, this sort of concept began at the beginning of the Clinton administration, that sort of looked at the way companies were trading rights to pollute and tried to bring this kind of, quote/unquote, “marketplace approach” to the communications industry.

In essence, it also harks back to a Reagan concept that the public interest is only defined in terms of what the public is interested in. In this case, they view it as cash. So, it’s an absolute — it’s a sad commentary that the FCC, which has, by the way, the first Democratic majority in twenty years —- these are the Democrats doing this. The Democrats took control of the FCC about three years ago -—


You mean the FCC commissioners.


That’s right. They have three-out-of-five commissioners. These are the Democrats doing this and the Clinton Administration doing this. And instead of preserving a portion of this public resource bandwidth to benefit the public, to open up additional channels of communication, to create new services and to create funding mechanisms for those services, instead they’re simply saying, OK, you can have it, and if you can afford to buy it, you can use it. But the public is not really benefiting from this, in terms of having a media system that is responsive and democratic.


We want to get Robert McChesney’s response, as well, but we have to break. Jeff Chester with the Center for Media Education, Robert McChesney, author of Rich Media, Poor Democracy. You are listening to Pacifica Radio’s Democracy Now! We’ll be back with them in just a minute.



You’re listening to Pacifica Radio’s Democracy Now!, the Exception to the Rulers. I’m Amy Goodman, here with Juan Gonzalez. Our guests: Jeff Chester, Center for Media Education in Washington; and Robert McChesney, author of Rich Media, Poor Democracy. Juan?


Yeah, I’d like to ask Bob McChesney, what about the argument that’s used often that, yes, there are fewer newspapers now, but the development of cable and then broadband and now — and, of course, digital broadcasting is allowing more choices for the public, in terms of channels or broadcast frequencies, and so that actually there may be concentration of ownership, but there is a greater variety of programming available to the public?

ROBERT McCHESNEY: Well, that’s certainly the key argument that’s made by these giant media firms when they put together these massive corporate complexes, like AOL-Time Warner and now this deal. The argument is, well, you don’t have to worry about the traditional concerns of concentration, because there’s billions of websites out there and there are cable channels and digital TV; we’re just a drop in the ocean in this new media environment.

And there’s an element of truth to that, obviously. You turn on — if you’ve got cable television or satellite TV, you’ve got a lot of channels. The internet’s got a ton of websites. The problem with that argument, though, empirically, is that the evidence so far shows that even though we have more and more choices, in theory, or more in practice, more and more channels or websites to choose from, the actual production of media content, journalism, entertainment, is increasingly concentrated into fewer and fewer hands. Just having a billion websites out there doesn’t really amount to a hill of beans, unless they’ve got the resources and the ability to compete so people can see them and want to use them.

In the case of the internet, for example, the evidence is fairly clear. The traditional media giants, the handful of companies like AOL-Time Warner and Disney, and Fox, have tremendous advantages over any upstarts of becoming commercially viable internet content players, as the term is used. So just having the chance to open a website doesn’t mean you’re going to do it effectively. In fact, the cards are very much stacked against it. Indeed, I would go so far as to say that the internet, to the extent it has affected our media system so far, has encouraged much greater concentration of ownership, rather than more diversity.

And as for cable, which has been around for twenty or twenty-five years, and I think probably all four of us can remember from the ’70s when cable came along, people went, “Gosh, thirty channels!” The world was going to be awesome then. We’ll have something for everyone. You know, it was we were liberated. Cable has really, you know, become entirely the domain of six or seven companies that own wholly or in part forty-nine of the fifty lucrative cable channels, and the channels basically do four or five different genres — commercial carpet bombing: children, business news, TV reruns, sports and shopping, and a couple others. So it’s hardly been this garden of — wonderful garden of information and culture, but in fact it’s been basically a massive shopping mall.


Jeff Chester, at this point, what can be done?


Well, I want to respond to that, because I do think that the developments with the internet are hopeful and positive, and what we want to do is maintain that kind of diversity as we move forward. I agree with Bob, the key issue is financing resources. But if we don’t have the space open to us, then we won’t even be able to reach people now.

You know, this new — the new media system is coming in. It’s called broadband. And cable is going to be the dominant provider of the internet in the future, at least in terms of cities. Right now the cable industry wants to impose its own model over the internet, where it will get to pick and choose which websites go first and fast and which are available and which are not.

That’s why a number of organizations—the ACLU, Consumers Union, Consumer Federation of America, Media Access Project, my group, Ralph Nader and others—are fighting a campaign for their access to the internet in the future. It’s called Open Access Initiative — you can go on any of those websites — but making sure that the next generation of the internet is open, that they can’t discriminate against any kind of content provider, including someone like Pacifica, and that there’s space for us to produce, is very, very important. It’s the major battle.


Well, but space is also related often to position, because I’ve seen, for instance, here in New York City, Time Warner, the major cable operator, has been pushing the public access channels further and further higher up on the channel spectrum, where people routinely, of course, start with the lower channels, and so they’re actually withdrawing more and more from their commitment to public access just by the position that they give these channels.


Well, but this is not public access. When we talk about open — we don’t have the time to go into this and I hope you will do a show just on this — but we talk about rules to ensure, as part of the open access movement, that the noncommercial and the civic are placed in a prominent way, you know, within the new system as the commercial entities, and, in fact, some communities, like Portland, Oregon, have gotten into their cable franchises agreements that the — that 10% of the bandwidth are reserved for civic use and that the data, the video for that 10% is treated at the same preferential terms as the commercial information. That’s very key.

So there are a lot of strategies that we can engage in now that are policy-based, that will require activism at the local level, at the state level and the federal level, to give us some kind of more equitable footing. Look, it’s going to be an uphill battle, but this is the time to fight it. Otherwise, the AOL-Time Warner Disneys, and the Chicago Tribune, will have the whole thing locked up. And we can’t afford to let them have that.


Well, we want to thank you both very much for being with us. Jeff Chester of the Center for Media Education, how can people get in touch with you?


Well, you can go to or, if you happen to have internet access, or you can call at (202) 331-7833, and be sure to read Professor McChesney’s books, because they tell the history of what happens if you don’t do public interest policies in time.


Professor Robert McChesney, Rich Media, Poor Democracy, where can people get more information on your columns and your book? Communications, Politics in Dubious Times is the subtitle.

ROBERT McCHESNEY: Well, actually, I have a website,, that has sort of all the information about what I’ve done and about groups like Jeff’s —


I want to thank you both for being with us, and we will certainly continue to pursue these issues.

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