Media Ownership Rules Must Adjust to the Digital Era

Media Ownership Rules Must Adjust to the Digital Era

Tuesday, 14 November, 2017 - 13:15
Do you check your Twitter feed to get the latest news? Monitor trending topics on your Facebook page to see what’s making headlines? Set news alerts on Google News? Read blogs analyzing the latest at the White House? Watch breaking news on cable networks or YouTube channels?

No doubt most of you do some or all of these things. But none of these information sources exist in the regulatory world of the Federal Communications Commission, where core media ownership rules presume the marketplace for news is defined entirely by pulp, rabbit ears and transistor radios. In this archaic world, Americans get their news only from newspapers and broadcast television and radio stations, and the internet doesn’t exist.

For over four decades, the F.C.C. has restricted the ability of broadcast media outlets to also own newspapers, and vice versa, in the same market, under what is known as the newspaper-broadcast cross-ownership rule.

This rule was established in 1975 with the stated purpose of preserving and promoting a diversity of viewpoints. Arguably, it made sense at the time. But with the internet now dominating the news landscape, the rule is no longer needed, and may actually be undermining the diversity of viewpoints it was intended to foster.

The print newspaper business is dying, and for some papers, this rule has probably hastened their demise. Roughly one-quarter of American newspapers have gone out of business since 1975, and many of those that remain are struggling. Today, only 18 percent of Americans read print newspapers regularly. Less than 10 percent under the age of 50 do. By a large margin, people instead turn to the internet for news.

For newspapers to continue to play an important role in civic engagement, they need more access to capital. Their decline has created a real threat to independent reporting at the state and local level. A broadcaster’s investment in a newspaper could go a long way toward keeping citizens informed. (Indeed, the number of TV and radio stations has doubled over the past half-century, even as newspapers have been vanishing.)

There’s ample evidence that the cross-ownership rule has led to less local reporting. When the F.C.C. adopted the rule, some newspaper-broadcast combinations were allowed to continue. Multiple studies have found that, on average, a cross-owned TV station produces more local news than comparable non-cross-owned stations. And a cross-owned radio station is four to five times more likely to have a news format. This makes sense, because a company that owns both a newspaper and broadcast outlet is able to gather the news and distribute it more cost-effectively across its multiple platforms.

Simple fairness is another reason to change the rule. We need to create a level regulatory playing field. It makes no sense for internet giants like Google, Facebook and Twitter to be allowed to buy newspapers while a small AM radio station is prohibited from purchasing its local paper. Those companies increasingly dominate advertising, the major revenue source for news outlets; Google and Facebook have claimed 100 percent of recent online advertising growth, and their digital ad revenue this year alone will be more than twice the entire 2016 revenue of the radio industry. This rule thus singles out struggling news outlets for stringent regulation while leaving the biggest players untouched.

Critics of this proposal have expressed concern that eliminating the rule will lead to additional media consolidation. I understand that point of view and recognize that some limits are needed. That’s why, for example, F.C.C. rules will continue to prohibit any company from owning more than two television stations in any market.

But as with any issue, it is important to go beyond the slogans and look at the specifics. And whether we look at the history of grandfathered newspaper-broadcast combinations in bigger cities like Chicago or smaller ones like Scranton, Pa., experience does not show that the residents in those communities have been harmed or their news marketplaces have been monopolized. Rather, we generally see news outlets that have been able to better serve the public.

For these reasons, the F.C.C. is scheduled to vote at its meeting next Thursday to repeal the newspaper-broadcast cross-ownership rule. This common-sense move is not only long overdue, it also has support that crosses partisan lines. For example, Reed Hundt, President Bill Clinton’s first F.C.C. chairman, argued in a speech in 2013 that “the rule is perverse.” And this year, Greg Walden of Oregon, the Republican chairman of the House Energy and Commerce Committee, joined with Representative John Yarmuth, a Democrat from Kentucky, to co-sponsor legislation that would repeal this rule. But we don’t need Congress to act; the F.C.C. can get rid of the rule itself.

In 2003, this newspaper noted on its editorial page that “making the argument that the current rules are outdated is easy.” The case is even stronger today. Few regulations are more disconnected from today’s realities than the F.C.C.’s media ownership rules.

The New York Times

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