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Weakening of Media Consolidation Rules Helped Murdoch Build U.S. Media Empire

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The intense scrutiny on Rupert Murdoch and practices by News Corp. employees is also widening the spotlight on its vast media holdings in the United States. News Corp. owns a number of outlets, including Fox Broadcasting Company, Fox News Channel, the National Geographic Channel, HarperCollins, TV Guide, the Weekly Standard, the New York Post, the Wall Street Journal, as well as the film studios 20th Century Fox and Fox Searchlight. News Corp.’s dominant standing in the U.S. media received a major boost in the early 1990s when the Federal Communications Commissions waived a regulation meant to curb media consolidation. We speak to Matt Wood, policy director at the media reform group, Free Press. [includes rush transcript]

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StoryJul 18, 2011A British Spring? Phone Hacking Scandal Threatens Murdoch Media Empire and British Government
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: Rupert Murdoch and his son and chosen successor, James Murdoch, appear before the British Parliament today as the phone-hacking scandal engulfing their media empire continues to grow. On Monday, Sean Hoare, a former reporter who helped blow the whistle on the Murdoch-owned News of the World, was found dead in his home in Britain. Hoare had been the source for a New York Times story tying the phone hacking to former News of the World editor Andy Coulson, who would later become chief of communications for British Prime Minister David Cameron. Coulson was arrested as the scandal broke open earlier this month.

Sean Hoare discussed his allegations against Coulson in an interview last September.

SEAN HOARE: I have stood by Andy and been requested to tap phones, OK? Or hack into them and so on. He was well aware that the practice exists. To deny it is a lie, is simply a lie.

AMY GOODMAN: Police say Sean Hoare appears to have died of natural causes, but that hasn’t lessened suspicion of foul play. Hoare not only talked about phone hacking, but phone tracking, as well—or as he said, they called it in the newsroom “pinging,” where he said News of the World would pay, he believed, police to track individuals’ locations. These revelations have made the link between the phone-hacking scandal and police, with allegations of illegal payments for news tips and disclosures of close ties between top police officials and News International executives.

On Monday, John Yates, the third-ranking official at Britain’s Metropolitan Police Service, announced his resignation. Two years ago, Yates made the now-infamous decision not to reopen an investigation into the phone hacking.

JOHN YATES: This case has been subject of the most careful investigation by very experienced detectives. It has also been scrutinized in detail by both the CPS and leading counsel. They have carefully examined all the evidence and prepared indictments that they considered appropriate. No additional evidence has come to light since this case has concluded. I therefore consider that no further investigation is required.

AMY GOODMAN: That was John Yates speaking in July 2009. Announcing his resignation Monday, Yates maintained he’s innocent of wrongdoing.

JOHN YATES: I simply cannot let this—the situation continue. It is a matter of great personal frustration that despite my efforts on a number of occasions to explain the true facts surrounding my role in these matters since 2009, there remains confusion about what exactly took place. I have acted with complete integrity, and my conscience is clear. I look forward to the future judge-led inquiry where my role will be examined in a proper and calmer environment and where my actions will be judged on the evidence rather than on innuendo and speculation, as they are at present.

AMY GOODMAN: The Independent Police Complaints Commission is now investigating Yates both for his handling of the phone-hacking case and for allegations he helped the daughter of former News of the World deputy editor Neil Wallis get a job with the British police. Yates’ resignation comes one day after Britain’s top cop—Metropolitan Police Commissioner, the head of Scotland Yard, Sir Paul Stephenson—also stepped down.

Pressure is also growing on Murdoch across the Atlantic. The FBI has launched a probe into allegations News Corp. employees tried to bribe police and hack into the voicemails of people killed in the 9/11 attacks. On Monday, the families of 9/11 victims asked to meet with the FBI and top Obama administration officials about the hacking allegations. Under U.S. law, News Corp. could face penalties even if the alleged bribery was committed entirely overseas.

The intense scrutiny on News Corp.'s practices is also widening the spotlight on its vast holdings in the U.S. media landscape. News Corp. owns a number of outlets, including Fox Broadcasting Company, Fox News Channel, the National Geographic Channel, HarperCollins, TV Guide, The Weekly Standard, the New York Post, the Wall Street Journal, as well as the film studios 20th Century Fox and Fox Searchlight. News Corp.'s dominant standing in the U.S. media received a major boost in the early 1990s when the FCC waived a regulation meant to curb media consolidation.

For more, we’re joined in Washington, D.C., by Matt Wood. He is the policy director at the media reform group Free Press.

Matt, welcome to Democracy Now! Let’s talk about the Murdoch empire here in the United States.

MATT WOOD: Sure. Thanks, Amy. Great to be here.

That’s an impressive list that you just rattled off, in terms of the number of properties that Mr. Murdoch owns. The one thing that was not on that list was 28 TV station licenses for local TV stations around the country. And that’s really the part that the Federal Communications Commission has the most extensive oversight over, thanks to the special bargain that broadcasters have to serve the public interest in return for their use of the public airwaves. So those are the kinds of rules that it’s—it’s not fair to say that Fox or News Corp. alone has been pushing for their eradication over the last couple decades, but it is fair to say that they’ve been among the most aggressive lobbyists on that score and succeeded in not only trying to eradicate or reduce those rules, but also to seek waivers of them and obtain those waivers when they can’t change the rules that underlie the media ownership limitation you just mentioned.

AMY GOODMAN: Explain exactly how Rupert Murdoch came to own television and newspaper in the same town. In New York, he owns the New York Post, he owns the Wall Street Journal, and he owns Fox.

MATT WOOD: Sure. Well, that’s actually a two-part story, at least, although it’s probably easier to break it into several components, but for present purposes I’ll talk about two, and we can go deeper on either of these.

Murdoch owns TV stations, in the first place, in the United States thanks to a series of steps he took to first buy TV stations in the mid-’80s. And at that time, he was required to become a U.S. citizen, or I should say he became a U.S. citizen himself in an attempt to get around restrictions that the FCC and statute places on foreign ownership of broadcast licenses. So, in 1985 he becomes a U.S. citizen and is allowed to purchase these TV stations that today, as I mentioned, number 28 in 13 of the top 15 markets and that cover basically the entire United States in those large metropolitan markets.

The story becomes a little more complicated with the newspaper-broadcast cross-ownership ban, a piece of regulation that prevents a newspaper from being owned by a television station. And that has been on the books since 1975. Murdoch again sought a waiver and obtained a waiver for those rules in the early ’90s, when he both had WNYW, the Fox affiliate in New York, and the New York Post in his holdings. That waiver was later expanded to include a second television station in New York. And he has, to this day, as you mentioned, controlled two TV stations, also the New York Post, a local paper in New York, the Wall Street Journal, several other properties in New York. Obviously, you mentioned Fox News Channel, as well.

And so, it really is a sprawling and multifaceted media empire, controlled in large part thanks to these waivers at the FCC issue not only of foreign ownership requirements, in the first place—and eventually those problems were resolved as Mr. Murdoch and his lawyers worked through the process with the FCC. But it’s not just the foreign ownership limitations that were overcome in the first place; it is these newspaper and broadcast cross-ownership bans that they have also worked to, again, eradicate, but when they can’t eradicate them, to obtain waivers for those rules that apply only to News Corporation and to its holdings.

AMY GOODMAN: How did Rupert Murdoch get American—U.S. citizenship?

MATT WOOD: Well, I’m not an expert on citizenship matters. He applied for citizenship and was naturalized in the mid-'80s. The problem with that was that News Corp. itself was still a foreign corporation headquartered outside the United States. And so, in the mid-'90s, despite the fact that Mr. Murdoch was a U.S. citizen, the FCC had reason to reopen that decision and to basically conclude that the allowance of him buying the TV stations in the first place was not proper, yet they allowed it to continue because of the perceived need for increased competition amongst network television stations, both locally and nationally. And so, despite the fact that in the mid-'90s the FCC revisited that decision and said that Murdoch's personal citizenship was not enough to satisfy the requirement and to eliminate the problem of foreign ownership of broadcast licenses, they, in the ’90s, concluded, well, there was a problem here, and News Corp. is not a U.S. corporation, it is in fact foreign-controlled, but they allowed him to continue owning the stations at that point in time. Eventually, that issue became moot because News Corp. moved its headquarters to the United States, but it was only after really two decades of wrangling and citizenship maneuvers to ensure that Mr. Murdoch and then his company were not running afoul of very clear prohibitions in U.S. law on foreign ownership of broadcast properties.

AMY GOODMAN: Matt Wood, can you talk about the larger issue of how the Murdoch empire here fits into, furthers media consolidation and the problems you see with that?

MATT WOOD: Sure. Thank you. I mean, that’s really what we’re hoping to look at in more detail here. Obviously, the phone-hacking scandal, all the other headlines you reported on this morning, are very newsworthy, and it’s something that we have joined in calls for investigation of, along with many other groups here in the United States and representatives in the legislature, senators and representatives alike calling for investigation. Those are serious charges, and those will be investigated in due course, I’m sure. And those could play into the media ownership issue, as well, because there are FCC limitations and character requirements for licensees of television stations. So those could play into an eventual determination of whether or not Fox is fit to hold licenses for broadcast stations. But the larger issues you mentioned are just as important here, and we hope that this helps to shine a spotlight on media consolidation more generally.

We see at least two problems with media consolidation, and we could probably list several more. But again, at a high level, media consolidation and massive concentration in the hands of a single owner allows for that single media spokesperson, that single voice, to control the political debate in ways that probably weren’t imagined 10 or 20 years ago, before Mr. Murdoch became so expert at it. So we have politicians not just beholden to a company based on campaign contributions—that can be the case sometimes—but really beholden to them because of the need for positive coverage and the fact that the newspapers, the television stations, the cable news channel, all the news properties put together can have so much sway over the election and on the policy debates occurring here in Washington, D.C., and around the country after that.

I think a second point to mention here is that massive consolidation and concentration of media properties eliminates independent voices, like The Guardian, for instance, in the United Kingdom, which brought to light a lot of these charges in the first place, like programs that in the United States might have been able to bring charges to light or shine a brighter spotlight on media concentration in the past, if it were not for the fact that the media is so concentrated to begin with and really doesn’t do a terribly good job of reporting on itself and on the aspects of media concentration and consolidation that drown out independent voices and prevent people from talking about these very important policy issues. So we think that it both affects the—a lack of diversity of viewpoints on the air and a lack of diversity of viewpoints in government and can contribute to an unwillingness to investigate these kinds of practices that we’re seeing come to light now.

AMY GOODMAN: Matt Wood, what about the issue of newscasters having responsibilities to cover the issues? A lot of people, of course, have been noting that Fox has not been covering itself. The news during the day, they will mention, you know, some of the facts, but when it comes to the evening shows, there is a noticeable lack of coverage. What is the significance of that, if any?

MATT WOOD: Well, it’s significant, but I’m not sure that there’s regulation that should be designed to overcome that. You’re sort of referring to the Fairness Doctrine, which is a doctrine that the FCC abolished back in the '80s and actually just recently took off the books officially. That was an obligation that was placed on broadcasters, and broadcasters alone. And again, that's because of the special relationship that broadcasters have with the Federal Communications Commission. They are licensed to use the public airwaves and so have a special duty to serve the public interest and serve the communities that they’re licensed to serve. That’s something that Free Press is not calling for the revival of at this point. It’s something that is very controversial because of the First Amendment implications.

Really, Fox News, when it comes to the cable channel, would never have been subject to that regulation in the first place, although some people have called for reviving it and extending it. That’s not something that we see as a solution. We think the solution is better media ownership rules to prevent massive consolidation, to increase the number of voices out there. It’s long been said that the cure for a lack of the coverage of issues is more voices and more speech, and we think that these media ownership rules we were discussing a moment ago are just absolutely critical to ensuring that there are multiple viewpoints on the air, but whether it’s on broadcast or cable platforms, and also to ensure that there are independent voices and investigative journalists out there talking about these issues. So if Fox News doesn’t want to cover itself, that’s understandable, perhaps. The solution should be more and better journalism from other outlets and from other investigative reporters and other sources that can report on Fox and report on Mr. Murdoch and his doings.

AMY GOODMAN: Matt Wood, I want to thank you for being with us, policy director at Free Press, which you can find online at freepress.net. This is Democracy Now!, democracynow.org, The War and Peace Report. At 10:00—at 9:30, after the Democracy Now! broadcast, online at democracynow.org we will be broadcasting the parliamentary hearings, where James Murdoch, Rupert Murdoch, and as well as Rebekah Brooks, will be testifying. You can go to democracynow.org. We’ll be back in a minute.

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