Media future: Risk of monopoly?

Rewriting ownership rules could affect the balance between commercial and public interests.

The American media could be poised to undergo another round of massive consolidation, and consumer activists are incensed.

The Bush administration has begun the most extensive review ever of the rules that govern the nation's networks, television stations, and cable systems. The rules were originally designed to ensure that no single Citizen Kane got a lock on the nation's marketplace of ideas. They restrict such things as one company owning two major TV stations in the same town.

To the nation's media giants, such as News Corp. and Viacom, they are outdated regulations that hinder expansion and fail to recognize the vast array of news and entertainment now available to consumers through cable systems and the Internet.

But for consumer activists, the rules are as fundamental as the First Amendment in ensuring the health of American democracy. Especially during this spate of corporate scandals, the notion of lifting some of the few checks left on the broadcast media is an anathema to them.

It's a battle that pitches commercial interests against long-standing notions about how to serve "the public interest." And it will help define the role media will play in American democracy well into the next century.

"The question is whether our media landscape has truly changed so dramatically that we no longer need to rely on regulations to ensure that democracy is well served," says Philip Napoli of Fordham University. "That's such a critical question that it's incredibly important that any decisions made are thorough and aren't ideologically driven."

The rules to be reviewed were designed so that information is provided by a diversity of owners. The idea is to ensure that when Americans turn on the TV, they're exposed to an array of ideas, representing the full spectrum of political thought.

In addition to forbidding a company from owning two major TV stations in the same market, or a major newspaper and a top station, the rules also put a 35 percent cap on how much of the public one network can reach.

Lobbyists for the nation's media giants contend that they are now unnecessary, because of the advent of cable news and the Internet. "Flexibility in the broadcast marketplace is critical in today's highly diverse media environment, particularly in light of the fundamental changes that have taken place over the years," Viacom said in statement.

Due to earlier mergers, some companies have already bumped up against the rules. Indeed, the review was prompted, at least in part, by a lawsuit brought by News Corp.'s Fox network, which owns a newspaper and two TV stations in New York City.

The Tribune Co. also owns both newspapers and television stations in four cities, mostly as a result of its buying the Times Mirror Co. In fact, it has owned a station and newspaper for more than two generations in Chicago, a situation that was grandfathered in when the rules were set in 1975. "Where's the problem?" asks the Tribune Co.'s Shaun Sheehan. "That's been our stance all along."

Consumer activists are quick to respond. While there appears to be diversity on the surface, they note that a handful of corporations already control the national broadcast media and more than half the cable systems in the United States. "That's resulted in huge cutbacks in news and public affairs," says Jeff Chester of the Center for Digital Democracy in Washington.

Then there's the problem of sameness. In the fight for "eyeballs," the networks often mimic one another's successes, making it difficult to tell them apart. In radio, where consolidation has gone furthest, 66.6 percent of people who listen to news listen to stations that are owned by four companies, according to a study by the Future of Music, a nonprofit advocacy group in Washington.

Critics contend that's one reason why radio listenership is now at a 27-year low. "More and more people are complaining that radio formats are too bland and aren't serving particular needs," says Andy Schwartzman of the Media Access Project.

The consumer activists' concerns are even greater on the local level, particularly in small towns. If one company owns the major station and newspaper, and the owner has been falsifying his books WorldCom-style, would journalists be able to investigate their own company?

"In this year of financial scandals, we've learned the importance of keeping the checks and balances on the marketplace," says Gene Kimmelman, the Washington director of Consumers Union.

The FCC has commissioned eight studies to examine the issues surrounding the rules. The findings will be released in the next few months.