On June 2, the Federal Communications Commission (FCC) voted to loosen
the rules governing media ownership. As a result, media companies might
become even larger and the number of voices heard from in our society
even fewer. If the measure of a democracy is in the strength of its
voices, American's may soon become a whisper. If that happens, Wall
Street would decide what is heard on Main Street and the American
democracy would suffer as a result.
Under the new rules, it will be possible for a single media company like
Clear Channel Communications or News Corp., to buy the dominant
newspaper, the local cable-television system, three local television
stations and eight radio stations in a single market. In other words,
the rules were designed to encourage a massive consolidation of the
media industry, and a massive financial windfall for large media
companies and Wall Street. It should come as no surprise that the most
effective lobbyist for this legislation was a Wall Street media analyst
from the investment-banking firm Bear Stearns.
For example, these new rules would allow Clear Channel Communications,
which owns eight radio stations in San Francisco (KABL-AM 960, K101-FM
101.3,KISQ-FM 98.1,KKSF-FM 103.7, KMEL-FM 106, KNEW-AM 960 and KSJO 98.5
FM) to also own the San Francisco Chronicle, KRON-TV Channel 4 and
KTVU-TV Channel 2 as well.
Since the electronic media has become the dominant source of information
in our society, this would be an awesome responsibility.
Proponents promise these new media goliaths can handle this kind of
responsibility. Maybe. The reality could be much different. It will
take money to finance this media consolidation, and that money will be
raised in the capital markets. As a result, programming might reflect
the need to make debt payments and otherwise appease Wall Street, not
the culturally diverse view points in American society. The need for
cash might also make it more likely that news coverage of a story that
makes advertisers (or political
allies) uncomfortable could be compromised.
We've already seen examples of how this may look from two companies
which stand to benefit greatly from the rules changes. Fox News, owned
by News Corp., covered the war in Iraq with a nationalistic fervor.
Just as News Corp. removed the BBC News Service from its Chinese
satellite package to win favor with the Chinese government. Compare
that to Clear Channel's treatment of the popular country music group the
Dixie Chicks. After some members of the band spoke out against the war
in Iraq, Dixie Chicks songs were mysteriously dropped from some Clear
Channel play lists.
Maybe the Dixie Chicks absence from the airways had nothing to do with
the company's close ties with the Bush administration. But when
Trillium Asset Management Corp. asked Clear Channel if it would create a
policy specifically prohibiting their stations from blacklisting artists
for their political views, they responded that they would not. Not a
very rigorous defense of American ideals and a very short-sighted
Individual rights and the exchange of information and ideas are the
reasons why the capital markets flourished in this country. Diminish
either and the markets will suffer as well. When television news
supplanted daily newspapers as the country's number one source of
information, networks like CBS considered their news divisions a public
service, and journalists like Walter Cronkite were trusted for
presenting objective reports of the day's events. The FCC may have
ensured that will never happen again. If that is indeed the case, the
FCC brokered a deal that is unacceptable and un-American.
And that's not the way it should be.
Blaine Townsend is a vice president and portfolio manager for Trillium
Asset Management Corp., an investment advisor that specializes in
socially responsible investing.