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From the New York Times, September 12, 1999
The Many Media Voices of a Few Merged Masters
By STEPHEN LABATON
WASHINGTON -- If the media and telecommunications giants have their way, decades' worth of federal rules designed to guard the marketplace of ideas may soon fall, all in the name of the Internet.
In the past few days, top executives from four of the information industries' largest corporations -- Viacom, CBS, AT&T and Mediaone Group -- have asked the government to give them a break from tight restrictions intended to prevent cable and broadcast television from falling into too few hands.
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Measuring a Combined Viacom/CBS Against Other Media Giants
The theory behind the rules is that, in allocating a limited spectrum of communications frequencies, the government must insure that there are enough different voices, opinions and news gatherers to keep its citizens informed. Never before has a corporate merger threatened to exceed the current limits on concentration of media ownership. But two of this year's biggest deals -- Viacom's acquisition of CBS, announced Tuesday, and AT&T's pending purchase of Mediaone -- cannot be completed without either changes in the rules or significant divestitures.
Hoping to avoid selling assets that could be combined profitably, top executives of the companies told the Federal Communications Commission last week that the concentration rules are now archaic -- obsolete in an Internet world that unshackles producers of programming from old economic restraints and assures diverse voices and original content.
"There is no question that that rule is no longer relevant in a broadband Internet world," Mel Karmazin, chairman and chief executive of CBS, said of the regulation that would force Viacom and CBS to sell some stations to stay within caps limiting a company to stations serving 35 percent of the nation's homes.
A remarkably similar position was articulated to challenge similar rules governing cable TV systems. To replace regulations left unenforced after an adverse court decision seven years ago, the FCC had been prepared to issue new rules this week, but postponed them for at least a month after fierce lobbying from AT&T.
"Very significantly, the market has changed," said James Cicconi, general counsel and head of government relations for AT&T, which with the Mediaone acquisition will become the nation's largest cable company. "The government should now take a look at whether the original rationale of the rule is still valid -- namely, the ability to bottleneck programming."
What's the answer? Has the Internet indeed promoted new and original voices to the point that traditional concerns about diversity of content can be abandoned? Or -- despite the easy, low-cost access it provides to a cybermarketplace of ideas -- is the Internet quickly coming to be dominated by a handful of big corporations, just like television, radio, the movies and newspapers before it?
Some critics are concerned that the arguments put forward in favor of media mergers confuse content with delivery -- that while there may be many new channels being created to deliver information, there is remarkably little original information being gathered or produced.
At bottom, these analysts say, media companies are making claims for a diversity that simply doesn't exist.
"The same big players are every bit as keen on swallowing the Internet as they have the traditional media," said Mark Crispin Miller, director of the Project on Media Ownership and a professor of media studies at New York University. "The consensus is that the Internet is getting less diverse and more homogenized as it becomes more commercial."
Certainly, trends in the older media are hardly reassuring for the Internet.
The declining number of American newspapers is an old story. Where a half century ago there were some 2,200 daily newspapers, there are now about 1,500; more importantly, most cities have only one.
Radio has fallen on even harder times. While it used to be that many stations in even mid-sized cities had their own reporters, that has become the rare exception. Instead, most stations rely on the same handful of national and local news services.
Metro Networks, a Houston-based company that supplies traffic, weather, and sports reports to about 1,700 radio stations, has lately become a huge new presence in radio news, often supplying coverage to many stations in one market, sometimes with the same reporters appearing on several stations under different names to give the appearance of competing, exclusive reports. In New York, for example, Metro works for 41 stations.
While the number of television stations has grown sharply, from 96 in 1950 to 1,216 this year, studies show consistently that they give local news short shrift. "There is actually more local news than there used to be," said Janine Jaquet, research director for the Media Ownership Project. "The flip side is that a lot of this stuff is coming from fewer sources."
Many stations rely heavily on wire-service offerings, syndicated features and the kind of crime and violence stories that they -- and their competitors -- can cover easily by listening to a police scanner, and neglect other topics.
"A principal accused of child abuse makes the news; general problems in education don't," said Paul Klite, executive director of the Rocky Mountain Media Watch, a Colorado organization that studies news content around the nation.
The television industry points to cable as evidence that new media give rise to new sources of information. C-Span brings live congressional proceedings into cable subscribers' living rooms, and three 24-hour news and information channels -- CNN, MSNBC and Fox News -- vie for viewers' attention. Moreover, cable systems in a growing number of cities and regions are now offering 24-hour local news channels that some analysts say are bringing original reporting to their areas.
Still, some of cable's early promises of diversity have gone largely unfilled. In exchange for their local monopolies, for example, many cable companies vowed to serve the public interest by devoting channels to such civic-minded topics as local government, education and the arts. But in many cities, critics say, public access programming is mediocre at best.
"The public access channels on cable are virtually entirely unused," said Lawrence Grossman, the former president of both NBC News and PBS, at a Fordham Law School symposium earlier this year on the impact of large media mergers. "The last I saw, 18 percent of public access education and government channels were being used. And when they are used, they are virtually unwatchable."
Some viewers prefer a camera's unmediated broadcast of a city council meeting to a reporter's filtered account. But analysts say neither public access programming nor cable TV's heated chat-show debates substitute for original investigative reporting, or even the pedestrian but thorough coverage of public affairs once provided by local and national broadcasters.
"What you've got is a huge diminution of the number of voices providing information that is necessary for an informed citizenship, and the Internet doesn't change that," said Andrew Jay Schwartzman, president of the Media Access Project, a Washington group that promotes diversity on the airwaves.
"It certainly reduces the barriers to organizing and to discourse. That's important for democracy," he said. "But it's no replacement for journalism and news gathering."
By all accounts, the Internet was supposed to break the mold of the older technologies by offering a vast new array of voices and opinions. And indeed, a rich cast of original content of varying degrees of usefulness now flows from the Internet, from The Onion and Salon to Matt Drudge.
But while experts are divided over what the Internet may look like in the future, many agree that the most popular Web sites -- all controlled by commercial interests -- are already beginning to look alike.
"The notion that technology will create competition and new voices, and so we don't have to worry about these companies getting bigger, is false," said Robert W. McChesney, a professor of communications at the University of Illinois and author of a new book, "Rich Media, Poor Democracy" (University of Illinois Press, 1999).
McChesney maintains that powerful economic forces will inevitably lead to the domination of information on the Internet by today's media giants.
First, he said, because they have the newsrooms and production studios, the big media companies already control the means of producing the Internet's content. Even wealthy companies like Microsoft, he noted, have found it difficult to compete.
Second, McChesney said, established media companies already have both brand names that will attract viewers and relationships with advertisers.
Third, it is the established companies, he said, not the start-ups, that have the wherewithal to invest in the Internet for the long term, swallowing heavy losses for a few years in the hope of gaining longer-term profits.
And in any event, his research shows, about half of the venture capital provided to Internet start-ups is coming from established media companies. So they are likely, he said, to have a big interest in many of the new Internet companies that survive.
Other experts, of course, are more optimistic, seeing the Internet as a powerful forum for diverse and informative voices.
Andrew L. Shapiro, a senior adviser at the Markle Foundation, has recently written a book titled "The Control Revolution: How the Internet is Putting Individuals in Charge and Changing the World We Know" (Century Foundation/Public Affairs, 1999).
He points to what happened in December 1996 when Slobodan Milosevic, the Yugoslav leader, shut down an independent Belgrade radio station, Radio B92, which had regularly aired news of protests against his regime. The station rerouted its programming to the Internet, where it was available to computer users in Serbia and around the world.
"That was an outstanding example of how human rights advocates can use the Internet in ways they could never use television or newspapers to get around a thug like Milosevic," Shapiro said.
"It's certainly true that a lot of things that happened with cable, television, and radio -- that have led to the dumbing down of content -- are now happening on the portal sites," he continued. "But I'm still optimistic. A lot of it will take steering people to the appropriate content: away from the commercial portals to the more diverse sites."
While there will almost certainly be congressional hearings on the Viacom-CBS merger, there has been far less hand wringing among lawmakers about the recent information industry deals than there used to be even just a decade ago, when the trend of mega-media mergers began to take off.
Paul Wellstone, D-Minn., who was the only senator to openly criticize the Viacom-CBS deal for its possible effects on public discourse, said that the politicians' silence was a clear reflection of both Washington and media economics. There is no lobby these days for media populism.
"When you look at the mix of money and politics, it's all on one side," Wellstone said. "The political dialogue and political imagination is set within a narrow parameter."