Consolidation Nation

The slippery slope established by the Telecommunications Act of 1996 could soon get much slipperier. Three major media conglomerates have teamed up to pressure the Federal Communications Commission to drop the remaining restrictions on the ownership of broadcasting stations.

The three media giants—News Corp.'s Fox Entertainment Group, Viacom Inc. (parent company of the CBS and UPN networks and Paramount film studios), and General Electric Co.'s NBC division—have jointly petitioned the FCC seeking elimination of the ownership caps, which have been gradually loosened since the first major change was initiated seven years ago under the leadership of former Vice President Al Gore. The Telecommunications Act of 1996 launched a frenzy of mergers and acquisitions in the broadcasting industry that left two major radio players, Clear Channel Communications and Infinity Broadcasting, standing like giants above the remaining independents and small operators. The trend also saw the assimilation of the nation's few surviving independent TV stations by big corporations.

Ownership caps that included a law preventing the same company from controlling newspapers and radio stations in the same community were instituted decades ago by the FCC to ensure a diversity of viewpoints. That philosophy has been attacked heavily in the past decade by factions favoring "market solutions" to almost all social issues. Opponents of this view claim that market solutions inevitably lead to suppression of dissention and homogenization of entertainment, because almost all programming will originate with conglomerates. Present rules prevent any single company from controlling more than 35% of any given market.

Officials at the FCC have reportedly rolled out the welcome mat for Fox, Viacom, and NBC, and are said to be sympathetic to the companies' complaint that the ownership restrictions are outdated, according to a January 3 story in the Wall Street Journal. "In coming months, the agency plans to unveil rules it says will be better suited to a rapidly changing marketplace that bears few similarities to the one that existed when the rules were adopted decades ago," reported Yochi J. Dreazen. Fox and Viacom have challenged the TV-ownership cap in court; in 2001, the three companies left the National Association of Broadcasters after failing to persuade the trade group to abandon its support for the cap, Dreazen noted.

In today's Republican-dominated Washington, DC, the mood is pro-conglomerate. A recent decision by a District of Columbia US Court of Appeals overturned a limit on cable-TV ownership. With the aid of FCC Chairman Michael Powell, who has frequently indicated that he favors dropping or changing ownership rules, Fox, Viacom, and NBC could succeed.