Behind the News
A Consumer View on the FCC’s New Consolidation Rule
Q&A: Mark Cooper on cross-ownership
By Clint Hendler Thu 20 Dec 2007 03:22 PMTuesday, in a party line vote, the Federal Communications Commission issued a rule allowing certain newspapers and television stations to share the same ownership. In a November New York Times op-ed, Kevin Martin, a Bush-appointee and the Commission’s chair, argued that the move could forestall the erosion of local news coverage by salving the economic woes of newspapers. Public interest media watchdogs—and Democratic FCC appointees Jonathan Adelstein and Michael Copps—have warned that the rules are a dangerous step down the path of media consolidation.
A previous attempt by Republican FCC Chairman Michael Powell to do away with the longstanding cross-ownership ban was struck down in 2003 by the federal Third Circuit Court. Tuesday’s ruling was an attempt to operate within that decision.
CJR asked Mark Cooper, director of research at the Consumer Federation of America, to explain what the ruling means, whether it will help or hurt journalism, how it came to be, and what his organization—which opposed the move—might do to stop it.
Clint Hendler: What they were voting on seems at first glance to be a fairly narrow territory, since it affects only 20 cities. Is that a correct reading?
Mark Cooper: No, it’s not. It’s not a narrow territory. How you view the scope of the ruling is really a function of two things: one, what you think the Third Circuit Court of Appeals said about the old media ownership ban; and two, what you think a future commission would do under this new approach. It’s very up in the air.
Mike Powell proposed a rule back in 2003 that was a very, very, bright line test. It basically said that cross-ownership mergers in markets that had a certain set of characteristics—and it was only a very small set of markets that didn’t have those characteristics—would be in the public interest. Slam dunk, no questions asked, in our view. Basically in 170 markets across the country—there are only 210 total—newspapers could buy television stations.
CH: That would have been the Powell rule?
MC: That would have been the Powell rule, which would have scrapped the absolute ban on TV-newspaper combinations in the same city. The 2003 court ruling said that absolute ban is not in the public interest, and regulation of cross media ownership is in the public interest—but that the way that the FCC went about writing their regulations was not supported in the record.
So the court said the old ban is out the window, and a new rule could have been implemented, but the FCC just bungled it.
The rule it voted on Tuesday clearly says, “There is no ban.” And then it asks, “Where will we allow mergers to take place?” And instead of drawing a bright line, it draws a fuzzy line. Unlike Powell’s rule, which said that “mergers in these markets will be approved,” this rule says, “mergers under some circumstances will be presumed to be in the public interest, and under others, they will not be presumed to be in the public interest.” However, you can challenge the presumption.
Under the new rule, for a merger to be presumed to be in the public interest, it must fit four conditions: first, that the media outlets in question be in the top 20 markets (New York, L.A., etc., down to Sacramento—serving, in all, about half the country); second, that the television component not be one of the market’s four highest-ranking stations; third, that the merger will still leave eight independently-owned media outlets in the market with at least 5 percent of market share; and fourth, that the outlets in question will maintain independent editorial boards.
Now, to challenge a merger’s public-interest presumption, you would have to show that the merger would not increase the diversity of news outlets, or wouldn’t increase competition.
CH: So there is something built in to this presumability standard that allows challenges on a case-by-case basis?
MC: Yes, it’s called the “rebuttable presumption.” It can be rebutted. There are four factors, which are different from the four conditions I just described, which would come to bear on whether or not I could show that the presumption the merger was in the public interest was wrong. The big one from my point of view would be the market concentration analysis. If I could come in and show that the number-one newspaper merging with the number-five television station was going to create a very big media entity, I might be able to convince the Commission that it was concentrating the market, and therefore not acting in the public interest.
CH: So this stands in direct contrast to what Powell had done?
MC: Absolutely. Powell had drawn a bright line.
Now, we’ve discussed the top 20. Let’s look at the bottom 190 media markets. Under the new rule, media mergers in those markets would be presumed to not be in public interest.
But the media corporations could try to rebut that presumption. They could look at the market concentration. They could promise that they’d do more news. They could show that the newspaper or TV station they’re after is in financial distress. They could show that they’ll promise to have separate editorial boards. So they could use the same four conditions to rebut the presumption against the merger.
But the irony is that the four conditions that were used to get you the positive presumption in the big markets don’t apply to the little markets. Obviously, this is an individual, case-by-case determination.
So the question is, are these four conditions filters, or are they sieves?
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