September 5, 2003

September 5, 2003 | Commentary on Regulation

Adjusting the Picture

Most of us learned a long time ago not to believe everything we see on television. The current debate over broadcast ownership rules suggests a corollary: Don't believe everything you hear about television.

For a decade, gloomy talking heads have been telling Americans that, as the result of mergers and the growth of media companies, competition and choice is diminishing.

In the wake of this summer's FCC decision to ease broadcast ownership rules, the horror stories intensified, with talk of omnipotent media monopolies controlling our lives.

Certainly a terrifying prospect. But it has little connection to the realities of today's media marketplace. Instead of dwindling, choice and diversity in media are more vibrant today than at any time in American history.

The changes over the past several decades have been nothing short of astounding. Less than 30 years ago, television viewers in search of news were largely limited to the big three networks, and maybe an independent or two if they were lucky. And network news was maybe a half-hour per day.

Today, viewers can get sore thumbs flipping among their options. The number of broadcast TV stations has tripled since 1970. On cable, viewers can choose from three major 24-hour news channels, and a flock of smaller outlets, from Bloomberg News to C-SPAN to CBN.

And this doesn't count television's newest competitor, the Internet. With thousands of Web sites providing news, the Internet is increasingly becoming a key media outlet. According to Pew Research, for example, more than half of Americans with Internet access got news about the Iraq war online; 17 percent said the Internet was their primary news source.

Some critics pooh-pooh the Web, noting that most surfers go to established sites such as CNN.com, not independent blogs. But independent Web voices such as Matt Drudge have already had quite a significant impact. Besides, criticism of where Americans choose to go for news is beside the point -- what's important is that diverse options exist, not that they go to the ones policy-makers prefer.

Of course, having lots of outlets doesn't necessarily mean there are lots of owners. NBC, MSNBC and MSNBC.com are not each an independent voice. But such cross-ownership can actually be good for consumers, as it provides each outlet with the resources and presence needed to do a better job. Enormous resources and organizational expertise, for instance, went into covering the Afghanistan and Iraq conflicts. Much as we value the little guy, size does sometimes matter.

At the same time, even with the growth of large, integrated firms, ownership concentration is lower than in the past. According to an FCC study, the number of separately owned media outlets (including broadcast, cable and newspaper outlets) skyrocketed in most cities between 1960 and 2000 -- increasing more than 90 percent in New York, for instance. And this doesn't even account for the Internet.

Recognizing these tectonic changes in the news landscape, the FCC was right to ease restrictions on media ownership. And despite the surrounding hullabaloo, the FCC's changes were actually quite modest, generally raising limits incrementally. Networks, for instance, now can own stations that can potentially reach 45 percent of Americans, rather than the current 35 percent (a change that, curiously, was decried by media competitors such as The New York Times, whose distribution network covers 100 percent of the country).

The real question may be not whether reform went too far -- but if it went far enough. The FCC's action, after all, was necessitated by court orders requiring the FCC to show the ownership limits were still needed. Even as revised, they may not pass judicial muster. Given today's media marketplace, that might be more good news for consumers.

About the Author

James L. Gattuso Senior Research Fellow in Regulatory Policy
Thomas A. Roe Institute for Economic Policy Studies

Distributed nationally on the Knight-Ridder Tribune wire