Media Outlets in the Hands of Too Few?

WHERE do you get your news, America? From one source or several? What would happen if, tomorrow, the person who owned the hometown paper bought up the local radio and television station?

These are questions that media observers are asking as Congress hammers out the final version of a sweeping telecommunications reform - one that supporters say will enhance competition and critics deride as a threat to the diversity of local media.

The legislation would loosen restrictions on the number of media outlets that a single company can own. While the debate over media concentration has focused mostly on national mega-deals - Time Warner's proposed acquisition of Turner Broadcasting and Westinghouse's attempt to take over CBS, for example - the bigger threat may lie with hometown papers, radio stations, and TV stations, critics say.

"One person owning the majority of the media outlets in a community is a threat to the very system of democracy upon which our society is built," Vice President Al Gore said in August.

Certain activists within Congress agree. "This provision will make Citizen Kane look like an underachiever," says Rep. Ed Markey (D) of Massachusetts, who sits on the House Telecommunications and Finance subcommittee.

New media outlets

But the issue is not clear-cut. The same forces that are pushing traditional media outlets into fewer and fewer hands are also creating new kinds of outlets, such as the video programming over telephone lines and the explosive growth of the global computer network known as the Internet. Many media observers believe telecommunications reform will create more competition, not less.

"It's amazing that we're hearing this hue and cry" against reform, says Fred Cate, a law professor at Indiana University in Bloomington. "The days of three networks or four networks or one phone company was a time when you might be able to talk about media concentration meaningfully. It was government regulation that gave us that concentration." By deregulating, more industries will be free to enter the business, he argues.

It's clear that the majority in Congress agrees with this second argument. This summer, the House and Senate passed bills that would transform decades-old communications laws. Conferees from both houses were supposed to iron out their differences and speed the legislation to President Clinton.

The process has bogged down because long-distance and local telephone companies continue to squabble over when they can enter each others' markets.

Congressional reforms could mean big changes for local media. Currently, the federal government has strict limits on how many media outlets a company can own. The Federal Communications Commission (FCC) does not allow a company to own more than 12 TV, 20 AM radio, and 20 FM radio stations.

Furthermore, no one can own more than one TV station per market. And, except for a handful of special cases that predate federal rules, a community's newspaper and TV station can't be owned by the same person.

The Senate and House now want to allow one company to own TV stations that reach 35 percent of the nation's population, up from today's 25 percent limit. Worse, critics contend, the Senate bill would allow a broadcast TV and a cable TV station to merge.

The House bill would permit one company to own two broadcast TV stations in the same city (as long as only one was a powerful VHF station). Furthermore, the House would let newspapers merge with TV stations.

Although they have received little attention, such moves trouble several media observers.

"The only thing that really scares me ... is the breakdown of the local cross-ownership rules," says Herbert Howard, associate dean of the college of communications at the University of Tennessee in Knoxville. "We got away from TV and newspaper cross-ownership in the '70s and, I think, for the better." Allowing it again could decrease the diversity of a city's local media, he adds.

Already, a similar trend is under way in local radio, because the FCC now allows a company to own an FM and AM radio station in the same market.

"We've seen huge numbers of owners taking advantage of this," says Alan Stavitsky, a professor of journalism at the University of Oregon in Eugene. Many radio broadcasters applaud the new rule because it has allowed them to cut costs and boost profit, he adds. But in Eugene, "some jobs are being lost. [And] some of the stations that previously had a live presence are going to syndicated programming."

Clinton threatens veto

The fate of telecommunications is not at all clear. The Clinton administration has threatened to veto any bill if certain provisions, including media concentration, aren't changed. Congressional supporters believe they have the votes to sustain a veto.

But the economic and technological arguments for deregulation so far seem to be winning the day.

"The bill will increase competiton," says Kishore Chakraborty, management professor at Babson College in Wellesley, Mass. "Industries which used to be separate would now be competing against each other."

Policymakers, he adds, may have little choice in the matter. "It would be very hard to regulate them.... It's just impossible to control all these different kinds of technologies and industries when they are merging so much."