Media cross-ownership is the common ownership of multiple media sources by a single person orcorporate entity.[1] Media sources include radio, broadcast television, specialty and paytelevision, cable, satellite, Internet Protocol television (IPTV), newspapers, magazines and periodicals, music, film, book publishing, video games, search engines, social media, internet service providers, and wired and wireless telecommunications.
Much of the debate overconcentration of media ownership in the United States has for many years focused specifically on the ownership of broadcast stations, cable stations, newspapers, and websites. Some have pointed to an increase in media merging and concentration of ownership which may correlate to decreased trust in 'mass' media.[2]
Also known as "Big Tech," a collection of five major digital media companies are also noted for their strong influence over their respective industries:
Owns search engineGoogle, video sharing siteYouTube, proprietary rights to the open-sourceAndroid operating system, blog hosting siteBlogger,Gmail e-mail service, and numerous other online media and software outlets.
Owns the largest subscriptionover-the-top video service in the United States; it also owns many of the films and television series released on the service. Netflix also owns DVD Netflix (dvd.netflix.com), a mail-order video rental service. Netflix also has close ties toRoku, Inc., which it spun off in 2008 to avoidself-dealing accusations but maintains a substantial investment and owns theRoku operating system used on a large proportion ofsmart televisions andset-top boxes. See:List of assets owned by Netflix Inc.
Due to cross-ownership restrictions in place for much of the 20th century limiting broadcasting and print assets, as well as difficulties in establishingsynergy between the two media, print companies largely stay within the print medium.
Owns or operates 66 television stations in 54 markets, and holds properties in digital media. Comprises the broadcast television and digital media divisions of the old Gannett Company.
TheFirst Amendment to the United States Constitution included a provision that protected "freedom of the press" from Congressional action. For newspapers and other print items, in which the medium itself was practically infinite and publishers could produce as many publications as they wanted without interfering with any other publisher's ability to do the same, this was not a problem.
The debut of radio broadcasting in the first part of the 20th century complicated matters; theradio spectrum is finite, and only a limited number of broadcasters could use the medium at the same time. The United States government opted to declare the entire broadcast spectrum to be government property and license the rights to use the spectrum to broadcasters. After several years of experimental broadcast licensing, the United States licensed its first commercial radio station,KDKA, in 1920.
Prior to 1927, public airwaves in the United States were regulated by theUnited States Department of Commerce and largely litigated in the courts as the growing number of stations fought for space in the burgeoning industry. In the earliest days, radio stations were typically required to share the same standard frequency (833 kHz) and were not allowed to broadcast an entire day, instead having to sign on and off at designated times to allow competing stations to use the frequency.
The FederalRadio Act of 1927 (signed into law February 23, 1927) nationalized the airwaves and formed theFederal Radio Commission, the forerunner of the modernFederal Communications Commission (FCC) to assume control of the airwaves. One of the first moves of the FRC wasGeneral Order 40, the first U.S.bandplan, which allocated permanent frequencies for most U.S. stations and eliminated most of the part-time broadcasters.
TheCommunications Act of 1934 was the stepping stone for all of the communications rules that are in place today. When first enacted, it created the FCC (Federal Communications Commission).[11] It was created to regulate the telephone monopolies, but also regulate the licensing for the spectrum used for broadcasting. The FCC was given authority by Congress to give out licenses to companies to use the broadcasting spectrum. However, they had to determine whether the license would serve "the public interest, convenience, and necessity".[12] The primary goal for the FCC, from the start, has been to serve the "public interest". A debated concept, the term "public interest" was provided with a general definition by the Federal Radio Commission. The Commission determined, in its 1928 annual report, that "the emphasis must be first and foremost on the interest, the convenience, and the necessity of the listening public, and not on the interest, convenience, or necessity of the individual broadcaster or the advertiser."[13] Following this reasoning, early FCC regulations reflected the presumption that "it would not be in the public's interest for a single entity to hold more than one broadcast license in the same community. The view was that the public would benefit from a diverse array of owners because it would lead to a diverse array of program and service viewpoints."[14]
TheCommunications Act of 1934 refined and expanded on the authority of the FCC to regulate public airwaves in the United States, combining and reorganizing provisions from the Federal Radio Act of 1927 and theMann-Elkins Act of 1910. It empowered the FCC, among other things, to administer broadcasting licenses, impose penalties and regulate standards and equipment used on the airwaves. The Act also mandated that the FCC would act in the interest of the "public convenience, interest, or necessity."[12] The Act established a system whereby the FCC grants licenses to the spectrum to broadcasters for commercial use, so long as the broadcasters act in the public interest by providing news programming.
Lobbyists from the largest radio broadcasters, ABC and NBC, wanted to establish high fees for broadcasting licenses, but Congress saw this as a limitation upon free speech. Consequently, "the franchise to operate a broadcasting station, often worth millions, is awarded free of charge to enterprises selected under the standard of 'public interest, convenience, or necessity.'"[15]
Nevertheless, radio and television was dominated by theBig Three television networks until the mid-1990s, when the Fox network and UPN and The WB started to challenge that hegemony.
In 1975, the FCC passed the newspaper and broadcast cross-ownership rule.[16] This ban prohibited the ownership of a daily newspaper and any "full-power broadcast station that serviced the same community".[14] This rule emphasized the need to ensure that a broad number of voices were given the opportunity to communicate via different outlets in each market. Newspapers, explicitly prohibited from federal regulation because of the guarantee offreedom of the press in theFirst Amendment to the United States Constitution, were out of the FCC's jurisdiction, but the FCC could use the ownership of a newspaper as a preclusion against owning radio or television licenses, which the FCC could and did regulate.
TheFCC designed rules to make sure that there is a diversity of voices and opinions on the airwaves. "Beginning in 1975, FCC rules banned cross-ownership by a single entity of a daily newspaper and television or radio broadcast station operating in the same local market."[17] The ruling was put in place to limitmedia concentration in TV and radio markets, because they use public airwaves, which is a valuable, and now limited, resource.
TheTelecommunications Act of 1996 was an influential act for media cross-ownership. One of the requirements of the act was that the FCC must conduct a biennial review of its media ownership rules "and shall determine whether any of such rules are necessary in the public interest as the result of competition." The Commission was ordered to "repeal or modify any regulation it determines to be no longer in the public interest."[18]
The legislation, touted as a step that would foster competition, actually resulted in the subsequent mergers of several large companies, a trend which still continues.[19] Over 4,000 radio stations were bought out, and minority ownership of TV stations dropped to its lowest point since the federal government began tracking such data in 1990.[20]
Since the Telecommunications Act of 1996, restrictions on media merging have decreased. Although merging media companies seems to provide positive outcomes for the companies involved in the merger, it might lead to negative outcomes for other companies, viewers and future businesses. The FCC even found that they were indeed negative effects of recent merges in a study that they issued.[3]
In September 2002, the FCC issued a Notice of Proposed Rulemaking stating that the Commission would re-evaluate its media ownership rules pursuant to the obligation specified in the Telecommunications Act of 1996.[14][21] In June 2003, after its deliberations which included a single public hearing and the review of nearly two-million pieces of correspondence from the public opposing further relaxation of the ownership rules[22] the FCC voted 3-2 to repeal the newspaper/broadcast cross-ownership ban and to make changes to or repeal several of its other ownership rules as well.[14][23] In the order, the FCC noted that the newspaper/broadcast cross-ownership rule was no longer necessary in the public interest to maintain competition, diversity or localism. However, in 2007 the FCC revised its rules and ruled that they would take it "case-by-case and determine if the cross-ownership would affect the public interest.[14] The rule changes permitted a company to own a newspaper and broadcast station in any of the nation's top 20 media markets as long as there are at least eight media outlets in the market. If the combination included atelevision station, that station couldn't be in the market's top four. As it has since 2003,Prometheus Radio Project argued that the relaxed rule would pave the way for more media consolidation. Broadcasters, pointing to the increasing competition from new platforms, argued that the FCC's rules—including other ownership regulations that govern TVduopolies and radio ownership—should be relaxed even further. The FCC, meanwhile, defended its right to change the rules either way."[17] That public interest is what the FCC bases its judgments on, whether a media cross-ownership would be a positive and contributive force, locally and nationally.
TheFCC held one official forum, February 27, 2003, inRichmond, Virginia in response to public pressures to allow for more input on the issue of elimination of media ownership limits. Some complain that more than one forum was needed.[24]
In 2003 the FCC set out to re-evaluate its media ownership rules specified in the Telecommunications Act of 1996.On June 2, 2003,FCC, in a 3-2 vote under ChairmanMichael Powell, approved new media ownership laws that removed many of the restrictions previously imposed to limit ownership of media within a local area. The changes were not, as is customarily done, made available to the public for a comment period.
Single-company ownership of media in a given market is now permitted up to 45% (formerly 35%, up from 25% in 1985) of that market.
Restrictions on newspaper and TV station ownership in the same market were removed.
All TV channels, magazines, newspapers, cable, andInternet services are now counted, weighted based on people's average tendency to find news on that medium. At the same time, whether a channelactually contains news is no longer considered in counting the percentage of a medium owned by one owner.
Previous requirements for periodic review of license have been changed. Licenses are no longer reviewed for "public-interest" considerations.
In June 2006, the FCC adopted a Further Notice of Proposed Rulemaking (FNPR)[26] to address the issues raised by the United States Court of Appeals for the Third Circuit and also to perform the recurring evaluation of the media ownership rules required by the Telecommunications Act.[27] The deliberations would draw upon three formal sources of input:(1) the submission of comments, (2) ten Commissioned studies, and (3) six public hearings.[14]
The FCC in 2007 voted to modestly relax its existing ban on newspaper/broadcast cross-ownership.[28] The FCC voted December 18, 2007 to eliminate some media ownership rules, including a statute that forbids a single company to own both a newspaper and a television or radio station in the same city. FCC ChairmanKevin Martin circulated the plan in October 2007.[25] Martin's justification for the rule change is to ensure the viability of America's newspapers and to address issues raised in the 2003 FCC decision that was later struck down by the courts.[29] The FCC held six hearings around the country to receive public input from individuals, broadcasters and corporations. Because of the lack of discussion during the 2003 proceedings, increased attention has been paid to ensuring that the FCC engages in proper dialogue with the public regarding its current rules change. FCC Commissioners Deborah Taylor-Tate and Robert McDowell joined Chairman Martin in voting in favor of the rule change. Commissioners Michael Copps and Jonathan Adelstein, both Democrats, opposed the change.[30]
Beginning in 1985, the FCC implemented a rule stating thattelevision stations broadcasting on UHF channels would be "discounted" by half when calculating a broadcaster's total reach, under the market share cap of 39% of U.S. TV households. This rule was implemented because the UHF band was generally considered inferior to VHF for broadcastinganalog television. The notion became obsolete since the completion of thetransition from analog todigital television in 2009; the majority of television stations now broadcast on the UHF band because, by contrast, it is generally considered superior for digital transmission.[31][32]
The FCC voted to deprecate the rule in September 2016; the Commission argued that the UHF discount had becometechnologically obsolete, and that it was now being used as a loophole by broadcasters to contravene its market share rules and increase their market share through consolidation. The existing portfolios of broadcasters who now exceeded the cap due to the change weregrandfathered, including the holdings ofIon Media Networks,Tribune Media, andUnivision.[33]
However, on April 21, 2017, under newTrump administration FCC commissionerAjit Pai, the discount was reinstated in a 2-1 vote, led by Pai and commissionerMichael O'Rielly. The move, along with a plan to evaluate increasing the national ownership cap, is expected to trigger a wider wave of consolidation in broadcast television.[34][35] A challenge to the rule's restoration was filed on May 15 by The Institute for Public Representation (a coalition of public interest groups comprisingFree Press, theUnited Church of Christ, Media Mobilizing Project, thePrometheus Radio Project, theNational Hispanic Media Coalition andCommon Cause), which requested an emergency motion to stay the UHF discount order – delaying its June 5 re-implementation – pending a court challenge to the rule. The groups re-affirmed that the rule was technologically obsolete, and was restored for the purpose of allowing media consolidation. The FCC rejected the claims, stating that the discount would only allow forward a regulatory review of any station group acquisitions, and that the Institute for Public Representation's criteria for the stay fell short of meeting adequate determination in favor of it by the court; it also claimed that the discount was "inextricably linked" to the agency's media ownership rules, a review of which it initiated in May of that year.[36][37][38]
The challenge and subsequent stay motion was partly filed as a reaction toSinclair Broadcast Group's proposed acquisition of Tribune Media (announced on May 8), which – with the more than 230 stations that the combined company would have, depending on any divestitures in certain markets where both groups own stations – would expand the group's national reach to 78% of all U.S. households with at least one television set with the discount. On June 1, 2017, theDistrict of Columbia Court of Appeals issued a seven-day administrative stay to the UHF discount rulemaking to review the emergency stay motion.[39][40] The D.C. Court of Appeals denied the emergency stay motion in a one-page memorandum on June 15, 2017, however, the merits of restoring the discount is still subject to a court appeal proceeding scheduled to occur at a later date.[41][needs update]
Following this, in November 2017, the FCC voted 3-2 along partisan lines to eliminate the cross-ownership ban against owning multiple media outlets in the same local market, as well as increasing the number of television stations that one entity may own in a local market. Pai argued the removal of the ban was necessary for local media to compete with online information sources like Google and Facebook.[42] The decision was appealed by advocacy groups, and in September 2019, theThird Circuit struck down the rule change in a 2-1 decision, with the majority opinion stating the FCC "did not adequately consider the effect its sweeping rule changes will have on ownership of broadcast media by women and racial minorities." Pai stated plans to appeal this ruling.[43] The FCC petitioned to the Supreme Court underFCC v. Prometheus Radio Project. The Supreme Court ruled unanimously in April 2021 to reverse the Third Circuit's ruling, stating that the FCC's rule changes did not violate theAdministrative Procedure Act, and that there was no Congressional mandate for the FCC to consider the impact on minority ownership of its rulemaking, thus allowing the FCC to proceed with relaxation of media cross-ownership rules.[44]
A 2008 study found that news stations operated by a small media company produced more local news and more locally produced video than large chain-based broadcasting groups.[14][45] It was then argued that the FCC claimed, in 2003, that larger media groups produced better quality local content. Research by Philip Napoli and Michael Yan showed that larger media groups actually produced less local content.[14][46] In a different study, they also showed that "ownership by one of the big four broadcast networks has been linked to a considerable decrease in the amount of televised local public affairs programming"[14]
The major reasoning the FCC made for deregulation was that with more capital, broadcasting organizations could produce more and better local content. However, the research studies by Napoli and Yan showed that once teamed-up, they produced less content. Cross ownership between broadcasting and newspapers is a complicated issue. The FCC believes that more deregulation is necessary. However, with research studies showing that they produced less local content - less voices being heard that are from within the communities. While less local voices are heard, more national-based voices do appear. Chain-based companies are using convergence, the same content being produced across multiple mediums, to produce this mass-produced content. It is cheaper and more efficient than having to run different local and national news. However, with convergence and chain-based ownership you can choose which stories to run and how the stories are heard - being able to be played in local communities and national stage.
Robert McChesney is an advocate for media reform, and the co-founder ofFree Press, which was established in 2003.[47] His work is based on theoretical, normative, and empirical evidence suggesting that media regulation efforts should be more strongly oriented towards maintaining a healthy balance of diverse viewpoints in the media environment. However, his viewpoints on current regulation are; "there is every bit as much regulation by government as before, only now it is more explicitly directed to serve large corporate interests."[48]
McChesney believes that the Free Press' objective is a more diverse and competitive commercial system with a significant nonprofit and noncommercial sector. It would be a system built for the citizens, but most importantly - it would be accessible to anyone who wants to broadcast. Not only specifically the big corporations that can afford to broadcast nationally, but more importantlylocally. McChesney suggests that to better our current system we need to "establish a bona fide noncommercial public radio and television system, with local and national stations and networks. The expense should come out of the general budget"[49]
Benjamin Compaine believes that the current media system is "one of the most competitive major industries in U.S. commerce."[50] He believes that much of the media in the United States is operating in the same market. He also believes that all the content is being interchanged between different media.[51]
Compaine believes that due to convergence, two or more things coming together, the media has been saved. Because of the ease of access to send the same message across multiple and different mediums, the message is more likely to be heard. He also believes that due to the higher amount of capital and funding, the media outlets are able to stay competitive because they are trying to reach more listeners or readers by using newer media.[52]
Benjamin Compaine's main argument is that the consolidation of media outlets, across multiple ownerships, has allowed for a better quality of content. He also stated that the news is interchangeable, and as such, making the media market less concentrated than previously thought, the idea being that since the same story is being pushed across multiple different platforms, then it can only be counted as one news story from multiple sources. Compaine also believed the news is more readily available, making it far easier for individuals to access than traditional methods.[53]
A 2012Gallup poll found that Americans' distrust in the mass media had hit a new high, with 60% saying they had little or no trust in the mass media to report the news fully, accurately, and fairly. Distrust had increased since the previous few years, when Americans were already more negative about the media than they had been in the years before 2004.[54]
Critics of media consolidation in broadcast radio say it has made the music played more homogeneous, and makes it more difficult for acts to gain local popularity.[55] They also believe it has reduced the demographic diversity of popular music, pointing to a study which found representation of women in country music charts at 11.3% from 2000 to 2018.[55]
Critics point out that media consolidation has allowedSinclair Broadcast Group to require hundreds of local stations to run editorials byBoris Epshteyn (an advisor toDonald Trump), terrorism alerts, and anti-John Kerry documentaryStolen Honor, and even to force local news anchors to read an editorial mirroring Trump's denunciation of the news media for bias andfake news.[58]
^Thomas I. Emerson (1970).The System of Freedom of Expression. New York: Vintage Books. pp. 654–655.
^Amendment of §§73.34, 73.240 and 73.636 of the Commission's Rules Relating to Multiple Ownership of Standard, FM and Television Broadcast Stations, 50 F.C.C. 2d 1046 (1975).
^For example, the local television multiple ownership rule and the national television ownership cap (among others). See R&O/NOPR 2003,supra note 21, at 3-4.
^David K. Scott; Robert H. Gobetz; Mike Chanslor (2008). "Chain Versus Independent Television Station Ownership: Toward An Investment Model Of Commitment To Local News Quality".Communication Studies.59 (1): 84.doi:10.1080/10510970701648624.
^Philip M. Napoli; Michael Z. Yan (2007). "Media Ownership Regulations and Local News Programming on Broadcast Television: An Empirical Analysis".Journal of Broadcasting & Electronic Media.51: 39.
