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Merge Ahead
The new FCC rules on cross-ownership, which inevitably will mean further media consolidation, have their detractors—some of whom may take their case to court
By Dan Levine

The Hartford Courant treated its readers to a particularly crafty editorial on April 28, arguing that the Federal Communications Commission should abandon its restrictive rules on media cross-ownership because—get this—they violate the right to free speech.

Six paragraphs into its missive, the nation’s oldest continuously published daily decided to acknowledge its own stake in the upcoming FCC vote.

“This newspaper is part of Tribune Co., which owns 26 television stations across the country. In addition to the Courant, Tribune’s Connecticut portfolio is made up of WTIC, Channel 61; WTXX, Channel 20; the Advocate weekly newspapers; the dailies in Stamford and Greenwich; ctnow.com; and ValuMail, a direct-mail business,” they wrote.

Indeed, the Tribune Company’s business model is most apparent in Connecticut: Prior to June 2, Tribune violated FCC rules twice over by owning two TV stations and a daily newspaper in the Hartford market, escaping divestiture only through a federal waiver. Nationally, the Tribune Company is regarded as one of the main corporate lobbyists trying to crash the media regulatory system, along with Gannett Newspapers and the New York Times Company.

They’re succeeding. The FCC followed its orthodox pro-deregulation chairman Michael Powell and voted 3-to-2 on June 2 to rescind prohibitions on companies owning a newspaper and TV station in the same market, along with expanding the number of TV stations a company is allowed to own nationally.

Now those Tribune waivers in Connecticut are no longer necessary, and the company can export its “synergy” revolution to other markets. Far from a victory for free speech, grassroots activists and their political allies expect a wave of media mergers and acquisitions, cutting down the quantity of voices in the marketplace and the number of reporters scrutinizing power.

But if Tribune’s “Connecticut portfolio” is the logical outcome of Powell’s corporate-friendly brew, perhaps an antidote can be glimpsed in the same state. During the FCC proceedings, Connecticut Attorney General Richard Blumenthal, a Democrat, filed a brief in which he indicates the fight against media consolidation may move away from the FCC and Congress and into the courtroom. “Repeal of these rules would be a disservice to the nation and could require the attorneys general of individual states and other antitrust enforcement officials, to attempt to fill the void . . . through costly and time-consuming processes, including litigation,” Blumenthal wrote.

Imagine, an antitrust suit against the likes of Tribune, brought by a phalanx of attorneys general, reminiscent of the legal wars against Microsoft (in which Blumenthal participated). At this point, Blumenthal says he has not decided to move against any company, including Tribune. But his rumblings have media activists across the country listening. “I think it’s a very important avenue to pursue,” says Robert McChesney, a University of Illinois professor and coauthor of It’s the Media, Stupid. “Antitrust provisions have really deteriorated in their vitality in the last two decades. But the law hasn’t changed—it’s the way it has been enforced and interpreted that is much more business friendly.”

Though a mega-lawsuit in the name of media diversity is enticing, victory would be far from certain, according to antitrust attorneys, as the path from violating the former FCC cross-ownership rules to illegal monopoly is not a smooth one. Just because a company owns a daily newspaper, an alternative-weekly chain and two TV stations in a single geographic market—and just because that cross- ownership stifles the diversity of news available to consumers—doesn’t mean the company will meet the criteria of a monopoly that restricts trade.

Antitrust violations hinge on how attorneys define a particular competitive market, says Phil Weiser, an associate professor of telecommunications and law at the University of Colorado Law School. So if the defined market is newspapers, other properties like TV stations would be irrelevant in proving illegal market fixing.

Blumenthal acknowledges the difficulties. “Antitrust cases are far more complex and challenging than enforcement of cross-ownership rules, even though they seek to protect many of the same values,” he says.

Another problem is political. Just how likely is it that Blumenthal can challenge a dominant media power and survive to tell the tale? “The chances a state attorney general would take this kind of case,” McChesney says, “are about the same chances I would win the NBA slam dunk contest.”

But Blumenthal isn’t the only politician with antitrust on the brain. On May 21, Sen. Herb Kohl, a Democrat from Wisconsin, raised the issue in a Judiciary Committee confirmation hearing for Hew Pate, the Department of Justice’s new antitrust chief. Kohl asked Pate for his views on the DOJ intervening in media mergers to protect diversity of voices, with Sen. Patrick Leahy (D-Vt.) concurring. Competitive factors, not diversity factors, would drive any DOJ decisions, Pate responded.

Still, as the FCC moves along on its crusade, an antitrust suit becomes, in Weiser’s words, a “very credible threat.”


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