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The People vs. The FCC: The War is Not Over

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Just two weeks after the Federal Communications Commission granted big media conglomerates greater powers to secure monopolies on media markets, the Senate Commerce Committee will consider legislation tomorrow that would roll-back significant portions of the new rules.

Analysts and media activists predict that the June 2 decision by the FCC will lead to greater media consolidation and mergers and will ultimately swallow many smaller media outlets. The Commission, which is chaired by Michael Powell — son of Secretary of State General Colin Powell — voted 3-2, along partisan lines to change the rules governing media ownership.

“That was the crucial vote by the FCC,” says Professor Robert McChesney, author of several books on the media. “But lost in the shuffle is the crucial point that the FCC is an agency that is simply supposed to reflect the will of congress, it reflects our will.”

After a massive grassroots campaign to oppose the FCC decision, a bi-partisan group of lawmakers is now fighting to repeal large parts of the June 2 decision. Senator Byron Dorgan (D-ND) plans to offer an amendment that would prevent a T.V. network from owning television stations that collectively reached 35 percent of the national audience. The FCC raised that cap to 45 percent.

Dorgan is expected to be joined by Democratic senators Ron Wyden of Oregon and Ernest Hollings of South Carolina, as well as Republican senators Olympia Snowe of Maine, Kay Bailey Hutchison of Texas and Trent Lott of Mississippi.

Already two T.V. networks, Viacom — with its CBS and UPN networks — as well as News Corp’s FOX are above the national television audience. Both networks lobbied the FCC to eliminate the cap.

Tribune Company, which owns both television stations and newspapers, and other companies have lobbied the FCC to lift the 28-year-old ban preventing a company from owning a newspaper and television station serving the same market.

The FCC ruling was a partisan vote with the 3 Republicans winning over the 2 Democrats on the Commission. McChesney says the Republicans now fighting the FCC decision are under “tremendous pressure” from the White House to back off their opposition. He says the FCC ruling “is pay back time for the big media companies that have been supporting the Bush administration both financially and ideologically over the last few years. In fact over the entirety of Bush’s career. Olympia Snowe and Republicans are taking tremendous heat to fall in line. It’s to their great credit.”

Today, Democracy Now! broadcast portions of the first Senate Commerce Committee hearings on the ruling when Senator Byron Dorgan (D-ND) questioned FCC Chair Michael Powell a day after the ruling.

DORGAN: Chairman Powell, I regret to be so hard on the commission on this decision, because I like you personally. But you know from what I have said, I just think this is a decision by regulatory agency that seems toothless to me. The last thing we need is to have regulators with no teeth.

I want regulators to be tigers on behalf of the public interest. It looks for all the world to me and I think it looks for all the world to the rest of the American people like the majority of the F.C.C. could not or would not stand up against the interest of the big business here.

Let me describe a couple of things that I see in this process. I really believe you’re wrong, you say this was an open hearing. One hearing in Richmond, Virginia, you got a lot of comments but there’s no substitute from going around the country. You say there are modest changes. Clearly they’re not modest when nearly 200 cities newspapers will be able to buy the television stations. You say that it will promote more competition. Nonsense. The evidence suggests that simply not the case. You say that there will be few mergers and acquisitions. Of course that stands logic on its head. And you say the court made us do it. The court didn’t make you do it. I mean this is — old joke in the movie, who are you going to believe, me or your own eyes?

The evidence is in on all of these issues, Mr. Chairman. And I guess let me ask this question this way, because I believe it appears to me so evident that the big interests were served here at the expense of the public interests. Would you not agree with me that today those who most aggressively celebrate your decision are the biggest economic interests in broadcast in this country? Are they not the ones that are celebrating your decision?

POWELL: I have no idea who is celebrating.

DORGAN: You really don’t? Are you kidding me?

POWELL: Senator, I also know there is —

DORGAN: Let me. Are you kidding me? You really don’t know who is celebrating that decision?

POWELL: Me and the staff are celebrating being complete with the decision.

A majority of the Commerce Committee, which is headed by Arizona Republican John McCain, have said the new FCC rules go too far in loosening media-ownership limits, creating a danger that companies like Viacom Inc. and Clear Channel Communications Inc. will expand and reduce diversity in broadcasting.

McChesney says that the legislation being considered tomorrow by the Senate Commerce Committee is the beginning of the battle to reverse the June 2 decision. By law, he said, the FCC is supposed to reflect the will of Congress.

“[The FCC is] not like the Supreme Court or something that they have some tremendous autonomy,” McChesney told Democracy Now! “Congress has the power to overturn what the FCC has done to make it clear to the FCC that the point isn’t simply to serve private corporate interests as it generally has done.”

Prior to the June 2 decision, the FCC was flooded with e-mails, phone calls and nearly 500,000 cards and letters opposing deregulation. There were nationwide protests against the proposed changes to media ownership laws. But while ordinary citizens were writing letters and protesting in the streets, the powerful media corporations were lobbying the FCC in face-to-face meetings.

According to a study by the Center for Public Integrity, big broadcast outlets had more than 70 such meetings with the FCC, while public interest groups had only 5 opportunities to meet with the FCC prior to the June 2 vote.

Today, Democracy Now! examined the role of one of these big media lobbyists, Victor Miller. Wall Street Journal reporter Mark Wigfield detailed the relationship between the Bear Stearns media-analyst and the FCC.

“Mr. Miller had had a sort of unusual position in that he is seen by the commission certainly as what they call facts and figures guy,” Wigfield told Democracy Now!. “He provides industry numbers, he provides scenarios, what will happen with competition, et cetera. And sort of makes projections about what will happen as the industry’s configured differently as consolidation occurs. And he brings in — he also brings in other investors to learn about where the commission is going.”

In an investigative article that appeared in the June 3 Wall Street Journal, Wigfield quotes Susan Eid, counsel to FCC Chair Powell as saying Miller’s advice “is enormously helpful as you sort through the economic issues and financial issues in the industry…his analysis is rock-solid.”

But Miller is hardly an impartial “sounding board” for the FCC. Wigfield points out that Miller’s firm Bear Stearns has a banking relationship with Viacom Inc., owners of the CBS network, which has sought outright repeal of the FCC’s 35 percent cap. It has earned fees for investment banking from News Corp.'s Fox network, which joined Viacom in seeking repeal of the cap. It has told investors there is “lots of potential upside” at radio company Clear Channel Communications Inc., and has underwritten initial public offerings for the nation's second-largest radio broadcaster, Cumulus Media Inc., as well as for the seventh largest, Radio One Inc. Like Clear Channel, both companies recently asked the FCC to retain local market definitions.

Bear Stearns also has a banking relationship with Sinclair Broadcast Group Inc., which mounted a successful court challenge to the FCC’s “duopoly” rule that limits common ownership of two television stations in a single market. It also has banking relationships with Gray Television Inc. and LIN TV Corp., which seek relaxation of the rule. Bear Stearns analysts, including Mr. Miller, have positive ratings on many of these stocks.

Professor McChesney says the influence of people like Miller show “how incredibly corrupt this process has been at the FCC where you have basically on one side of the table all this big money and powerful lobbyists and other side of the table you have virtually every person in the United States.”

McChesney said that it is crucial that people concerned about media freedom in this country continue to call their representatives and urge them to repeal the FCC decision. “The entirety of public opinion is opposed to this, almost without exception,” he said. “Nobody likes this. The only people who like it are these powerful lobbies.”

He urged concerned people to go to his website for more information.

  • Tape: Senator Dorgan addressing FCC Chairman Michael Powell on June 3rd, the day after the FCC voted to relax media ownership rules.
  • Mark Wigfield, Wall Street Journal reporter who has been covering the Federal Communications Commission.
  • Robert McChesney, professor of communication at the University of Illinois at Urbana-Champaign and the author of eight books on media and politics, including Rich Media, Poor Democracy.


Wall Street Journal

Robert McChesney

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