Media Reform Takes the Spotlight(A)

It’s been exactly a year since we wrote about the issue of media reform for Investing for a Better World, and what a year it’s been for the issue. It started with a furor over obscenity on television related to Janet Jackson’s “wardrobe malfunction” at last year’s Super Bowl, and ended with the controversial chairman of the Federal Communications Commission stepping down while the rules he’d pushed to allow media giants to become even more dominant remain stuck in legal limbo.
Among a few other media-related highlights (or rather lowlights) of the year:
· Sinclair Broadcasting Group’s plan to force the 62 local TV stations it owns to broadcast “Stolen Honor”, a highly partisan critique of John Kerry’s war record just weeks before the election. Before a national outcry forced it to temper its broadcast, Sinclair had planned to broadcast the show as news rather than commentary and did not plan to provide the Kerry campaign with equal time for a response.
· Revelations that CBS News’ venerable 60 Minutes program relied on forged documents in a piece investigating President Bush’s National Guard service.
· Recent revelations that the Bush Administration paid journalists to promote its policies like the No Child Left Behind Act.
Given all this, it’s not surprising that public trust in the media continues to decline. Audiences for “old media” such as newspapers and television and radio broadcasts are declining too, with Internet, cable, satellite television and radio, and digital music players all competing for people’s overwhelmed attention. Indeed, as 2005 began, reports of the “death of mainstream media” appeared everywhere from Internet blogs to the pages of The Washington Post.
Time will tell whether that’s true or whether it falls into the category of Mark Twain’s famous response to reading his own obituary, “Reports of my death have been greatly exaggerated.” But even if mainstream media is on the ropes, established media companies are bigger than ever, and in fact continue to increase their reach into what we watch, read, and hear. For instance, Viacom (owner of CBS), General Electric (owner of NBC), Disney (owner of ABC), and News Corp. (owner of Fox) also own 90 percent of the top 50 cable TV stations. The three cable news networks are owned by GE (in partnership with Microsoft), News Corp., and–just for variety’s sake–media giant Time Warner. These same companies and a handful of others dominate Internet news sites. In 2003, the ten biggest media companies in the U.S owned 42% percent of the 20 most popular web news sites. In fact, Time Warner alone owns 20% of the top online news sites: CNN, AOL, Netscape, and Time. And in 2003, four companies accounted for two-thirds of all news radio listeners in the U.S.: ABC Radio, Clear Channel, Entercom, and Viacom. (Are some of these names starting to look familiar?) Further, as media companies grow in size and scope, they increasingly control the content they produce (looking for so-called synergies) and squeeze out independent production. The major broadcast networks had an ownership stake in just 12.5 percent of the new series they aired in 1990, which had climbed to 77.5 percent by 2002.
Okay, so despite the proliferation of new technology (but with the help of twenty years of deregulation in Washington, D.C.), big media companies are getting bigger. Does that matter? For lots of important reasons, it does. First, as Benjamin Franklin himself put it, “Freedom of the press belongs to those who own the presses.” An increasingly small number of companies get to shape our views of the most important issues of our day without significant competition from other sources. Fox News has been an enthusiastic supporter of the war in Iraq and not surprisingly, a study found that heavy viewers of Fox News were nearly four times more likely to believe “demonstrably untrue” opinions about the war (such as that weapons of mass destruction have been found in Iraq) than do heavy listeners/viewers of National Public Radio and PBS. Sinclair Broadcasting’s ham-handed efforts to attack John Kerry in the waning days of the 2004 presidential campaign provide another clear example of the potential power media companies have to advance a political agenda. And often, just as significant is what companies choose not to report. For instance, the Columbia Journalism Review found that media companies devoted almost no coverage of media industry deregulation in the run up to passage of the major 1996 Telecommunications Reform Act. A poll by the Pew Research Center in early 2003 found 72 percent of Americans had heard “nothing at all” about proposals pending at the FCC to further deregulate the media.
Even when there’s no overt political agenda, media consolidation can hurt local content and diminish programming. The city of Minot, North Dakota found that out the hard way in a life-and-death situation in 2002. Radio giant Clear Channel owned all six commercial radio stations in the city, which played pre-packaged content that Clear Channel distributed nationally from its headquarters 1,600 miles away. According to news reports, when a train derailment released a dangerous cloud of ammonia gas in town, for over an hour local emergency officials could not reach any local radio employees to get them to air warnings to stay inside. In the end, one Minot resident died and hundreds were hospitalized from exposure to the cloud. While it’s rarely this clearly a matter of life and death, the dramatic move towards nationally syndicated content has killed public affairs and educational content serves the needs of local communities.
Since 1984, the FCC has steadily relaxed rules limiting the dominance of large media companies, with little public notice. Then two years ago, the FCC under Michael Powell relaxed its rules yet again to allow a new wave of media consolidation. Under the new rules, a single company like Rupert Murdoch’s News Corp. could own the dominant newspaper, the local cable-television system, three local television stations and eight radio stations in a single market, thus controlling virtually all the news and information outlets in the area. The move drew a firestorm of unexpected criticism from groups across the political spectrum and 2.3 million Americans submitted comments to the FCC protesting the changes. E-mail comments came in so rapidly that it crashed the FCC’s servers. Although the FCC moved ahead with the rules, Congress and the Bush Administration appear to have gotten the message. Congress passed legislation partially rolling back the rule changes, and just last month, the Bush Administration announced it wouldn’t appeal a federal appeals court ruling that the FCC followed improper procedures in developing some of the new rules. Yet media reform advocates are cautiously waiting to see who President Bush will appoint to follow Michael Powell as chair of the FCC, and fear that the FCC may try to push Powell’s broad agenda in more piecemeal form to avoid another public outcry.
Trillium Asset Management is also watching the policy developments at the FCC, but in the meantime, we’ve been weighing in with some of the largest media companies, including Clear Channel, Disney, GE, and Viacom to call for more responsible use of the tremendous power they now have, such as doing a better job of meeting their public interest broadcasting obligations. This fall, we raised concerns about Sinclair Broadcasting’s extreme partisanship with some of the large consumer products companies that are its major advertisers. And we’re now partnering with Common Cause and other media reform groups to develop strategies that leverage the power of shareholder advocacy in the growing media reform movement and plan to launch some exciting new initiatives out of that partnership later this year. We’ll have updates on our website and in future issues of Investing for a Better World, unless of course, Time Warner buys them from us first.