The Big Picture
FCC brings national roadshow to Monterey to ask: are the TV and radio giants serving the public?
Thursday, July 15, 2004
The airwaves, through which radio and television signals travel unseen, are like the National Forests that cover vast expanses of the American West in blankets of pine and sagebrush. When you get to a place like the Los Padres National Forest in Big Sur, you can park your car at the trailhead, tie on your boots and walk deep into a vast wilderness of mountain crags and steep river valleys and know all the while that it’s all yours.
Who: The FCC Localism Task
What: Public Hearing
Where: Steinbeck Forum,
1 Portola Plaza, Monterey
When: July 21 at 6pm
Why: Recent public outcry at
media ownership rules
The Monterey hearing is one of only six such events around the country and the only one on the West Coast.
In previous hearings, two panels of local broadcasters, activists and citizens have testified before the commissioners, who will have questions for the panels.
The panel exchange is followed by an open microphone session for the public. At the San Antonio event, the hearing stayed open until all the public got a chance to speak. Comments are limited to two minutes.
Free tickets are available at the Steinbeck Center
Airwaves are the same. Yours and mine. We own them. The airwaves, which allow signals to beam from the top of a transmission tower into car radios or television antennas, are the property of the American public. And without those airwaves—defined as the “spectrum” of signal channels—radio and television broadcasts would be impossible. So a government agency, the Federal Communications Commission (FCC), manages them, just as the US Forest Service manages Los Padres. In the same way that a logging company needs to abide by certain land management rules if it wants to remove publicly-owned timber from a National Forest, the media companies that use the public airwaves—to play music, tell the news, and hawk products for advertisers—must abide by FCC regulations.
In fact, the media companies merely lease the right to use the airwaves from the people, through the FCC.
Airwaves are licensed for use by broadcasters with the understanding that they act responsibly and devote a portion of programming to the local public interest. But media companies, like logging companies, naturally try to carve out deals that are best suited to their profit, sometimes to the detriment of the public interest.
In the same way that a mining company can scrape down a mountain and leave a polluted crater, the nation’s big media companies, in the eyes of a growing number of critics, are being greedy and irresponsible. Some members of the public know they have a right to decide how the airwaves are used, and by whom.
And this summer, the public will be heard.
On July 21, the Federal Communications Commission will convene a hearing in Monterey—one of only six such meetings nationwide, and the only one on the West Coast—to gather comments on whether or not local broadcast media serves the public interest.
• • •
The hearings are essentially a reaction to a years-long trend of deregulation that began in the Reagan-era and continued in following years to the sweeping Telecommunications Act of 1996. That law was purportedly created to allow more open competition. In effect, it diluted the longstanding restrictions that prevented monopoly ownership.
In the words of the FCC itself: The Telecommunications Act of 1996 is the first major overhaul of telecommunications law in almost 62 years. The goal of this new law is to let anyone enter any communications business—to let any communications business compete in any market against any other.
If the intent of the law was truly to encourage more competition, it had the opposite effect in the end. Media companies used the relaxation of rules to go on an acquisition binge.
The results, which we live with today, are massive conglomerates that squeezed out smaller local operations through sheer scale. The Telecommunications Act led to mega-corporations like AOL-Time Warner. It also spurred a business strategy known as vertical integration, in which one company might own both the product produced, its distribution system, and even the necessary venues. (Clear Channel, which owns radio stations that choose what bands to play, as well as venues where those bands perform, is a good example.)
Last summer, the FCC went even further and pushed through new rules that would allow the major broadcasters to acquire more media outlets in a single market, allowing big companies to grow ever bigger through cross-ownership of radio and television outlets. Media activists criticized this move, because it was seen as diminishing fair competition and further building media monopolies.
(According to news accounts in the aftermath, the rules were made following some 71 private meetings between FCC commissioners and industry interests. There was a single public hearing on Feb. 27, 2003, in Richmond, Virginia.)
When word of the new rule change got out, the public and some members of Congress went nuts. The FCC reportedly got some two million pieces of correspondence complaining that rules emphasizing corporate dominance over the public interest were not right.
Sen. John McCain (R-Arizona), who has railed against the influence of corporate America on politics and society, issued a statement: “I continue to believe in the principle of allowing markets, and not government, to regulate the way businesses operate. But after chairing seven hearings on media ownership and observing unprecedented public outcry, it is apparent to me that the business of media ownership, which can so often affect the nature and quality of our democracy, is too important to be dealt with categorically. As a result, I have come to believe that stringent, but reasonable, limits on media ownership may very well be appropriate.”
In reaction to the outcry, the FCC formed what it calls a Localism Task Force to examine whether broadcast media still serves local communities. As part of the effort, the FCC launched the series of six hearings around the nation. In attendance should be the five commissioners—three Republicans, including chair Michael Powell (son of Colin), and two Democrats.
Already there have been hearings in Charlotte, NC, San Antonio, TX, and Rapid City, SD. The fourth hearing in Monterey will serve as the single venue for the entire West Coast. After a hearing in Portland, ME, a final hearing will be held in Washington, DC. Why Monterey was chosen has not been disclosed by the FCC.
This is a historic event for two reasons: First of all, it happens only four weeks after a federal circuit court in Philadelphia declared that the controversial rule loosening went too far. And it comes at a time when an effort to reform media is gathering steam.
• • •
The purpose of the FCC is to regulate any entity that emits a communication signal, be it a garage door opener or a megawatt FM radio station. It was formed through the Communications Act of 1934 to regulate both domestic and international communications. The commission’s five members are appointed by the President, and the dominant political party cannot have more than three members.
Members are also prohibited from having “financial interest in any Commission-related business.” Based in Washington, DC, the FCC is organized into several bureaus for enforcement, media, wireless communication and so on.
The FCC has made headlines lately in two prominent public actions. After Janet Jackson’s right breast was exposed at the 2004 Super Bowl, the FCC got half a million public complaints. Now it’s considering fining the broadcaster Viacom $550,000.
In a similar vein this summer, the FCC reached a $1.75 million settlement for indecency against Clear Channel Communications because of its broadcast of the rowdy and raunchy Howard Stern Show. In its duty to uphold the public interest, the FCC prohibits explicitly sexual and vulgar references during broadcasts in the morning hours when children are likely to hear it on mom and dad’s radio. But there are free speech considerations, and Stern was quoted as saying the fine had a “chilling effect on broadcasters.”
With such a broad reach, the FCC has enormous power to shape America’s media landscape. But its attempt to relax ownership rules last summer may have gone too far.
Arguing that the rule changes were unfair and favored megamedia, a grassroots community radio outfit called the Prometheus Radio Project sued the FCC in 2003. It was joined by several other plaintiffs—like-minded entities that believed the rules went too far—as well as major media companies.
On June 24, 2004, the US Third District Court of Appeals in Philadelphia issued an opinion that told the FCC to go back and do it over. In some cases, the court found that the commission did not provide “rational” and “reasoned analysis” for its proposed rule changes. It happens that the Monterey hearing will be the first to follow the court decision.
One of the plaintiffs joining Prometheus was the Media Alliance. Founded 28 years ago by concerned media professionals, it’s a San Francisco-based watchdog group that has been out organizing for the Localism Task Force hearing.
On a Friday morning in late June, a small group of activists gathered at a union hall in Salinas for a meeting to organize the public response at the FCC hearings. Among the gathered were Salinas activists who want to use the hearings to expand the use of lower power FM radio (LPFM), a growing trend of small community-based radio stations run with little to no advertising for the benefit of residents in a close, surrounding area. (Coincidentally, Sen. McCain has introduced a bill in the Senate that would grow LPFM stations from a few hundred today to thousands.)
Leading the meeting was Jeff Pearlstein, the Media Alliance’s executive director. Originally from New Jersey, he runs the organization on $350,000 a year, mostly from membership dues. When the FCC kicked down its rule revisions last summer, Media Alliance organized 13 hearings of its own, one of them attended by 650 people at San Francisco City Hall.
“We want to demonstrate that there is widespread concern from all aspects of society and to hear people’s suggestions. We have our own policy suggestions but we’ve also found local folks really get it,” Pearlstein says. “Everyone recognizes the problem. It’s so deep these days. There’s so little quality local news broadcasting available.”
Media Alliance contends that corporate imperatives to produce a profitable bottom line for stockholders has meant unacceptable cuts to news operations in television and radio.
“Study after study show that as media consolidates, there’s less and less space for local voices and community programming,” Pearlstein says. “This is not a left or right issue. It goes to the point that too few corporations are controlling too much of the spectrum.”
• • •
The San Antonio-based Clear Channel Communications, one of the biggest of the new breed of media giants, gets quite a bit of attention—for its widespread dominance and for a controversy over its alleged suggested censorship of certain songs following the September 11 terrorist attacks. (The FCC held one of its six localism hearings in San Antonio, which, according to news accounts, erupted into an emotional melee.)
A January 2004 study by Cornell University outlines Clear Channel’s explosive growth following the 1996 Telecommunications Act. The conglomerate went from owning 43 radio stations to owning 1,239 radio stations around the country, making it the largest radio operator, with 100 million listeners.
Clear Channel is also the nation’s top concert promoter—selling 30 million concert tickets in 2002; it’s a major player in “outdoor advertising,” with 716,000 billboards around the world; and it is now also a major television broadcaster, with 39 stations of various affiliates.
According to the study, which was done in conjunction with the AFL-CIO, Clear Channel’s revenue in 2002 was $5.9 billion (hefty, but far behind number-one media giant Time Warner’s $28.6 billion).
According to Pearlstein and other critics, the danger of Clear Channel is not its success, but its dominance to the detriment of the public. Company CEO Lowry Mays was famously quoted in a Fortune magazine article saying he’s not in the business of purveying music and news, but selling advertising.
The Cornell study concludes: “The overwhelming economic power and increasing political influence of media giants such as Clear Channel has already led labor unions, media activists, the courts and members of Congress, to develop initiatives designed to limit the concentration of media ownership…Clear Channel is but one case in point, however, it provides a dramatic example of the adverse consequences of deregulation not only on workers, but also on society as a whole.”
A local representative of Clear Channel in Salinas did not respond to an interview request by press time.
• • •
Rebecca Little, who now runs a Monterey advertising company, was an account executive for Clear Channel for more than a year, but has been in various forms of media sales for 30 years. She started at a little rock station called KLRB in Carmel in 1972, answering phones and doing a midnight radio show.
Over the years she has watched the industry consolidate and shrink, with a few dominant players like Clear Channel rising to the top. She sold advertising for them and the fact that the company owns a television station and six radio stations in the Monterey-Salinas market made her job easier. Still she doesn’t blame Clear Channel for wanting to make money.
“It’s just more of a sign of the times, and we as a people have lost control of the radio and television,” she says. “This isn’t just Clear Channel. This is a state of being. This is something we’re all going through. You can’t just attack one company. Everybody is doing what Clear Channel is doing. At the end of the day, it all comes down to how much money are we making. Now radio and TV are on the open market, in the stock market, so you have more people to answer to. When you do that, the rules change.”
When Little worked at KLRB in 1972, one of the disc jockeys was David Bean. Now involved in music promotion, Bean went on from KLRB to help found the Pacific Grove NPR-affiliate KAZU in 1976 and was general manager of a disco station, KZEN, in the late ‘70s. He will be a voice at the Monterey hearing.
When the FCC holds its hearing, there will be two panels made up of broadcast representatives as well as local community members. Bean has been nominated to serve as a panelist. He believes that society—particularly on the local level—has been poorly served by the current media ownership trends.
“I thought the days of regulation actually served the people, the community, much better than deregulation,” he says. “There was a separation of ownership in communities that allowed more voices and there were requirements that stations play what were called public service announcements on a regular basis. Now they are no longer required [and have been replaced with more advertising]. Thus the public is not being served. It’s just an obvious in-your-face thing.”
Although it’s not clear if Bean will be one of the FCC-selected panelists at the Monterey hearing, Joe Heston certainly will be.
President and general manager of KSBW, a television station owned by media conglomerate Hearst-Argyle, Heston has accepted an invitation from the commission to testify. He has no qualms about it and looks forward to pointing out how his station is locally oriented.
“We are happy the FCC is going to come out to this small, beautiful portion of the world to see localism in action,” Heston says.
Between KSBW’s 24-plus hours of news programming weekly and the station’s Web site, Heston says his station appropriately serves the public interest. He points to the station’s access to associate bureaus in Sacramento and Washington, DC. Heston says the station reaches 225,000 local households and has 81 full-time employees in three news bureaus. As evidence that KSBW is locally focused, he says a 2003 audit showed the company provided $2.6 million in television fundraisers and donated time for public service announcements.
“You can do well by doing good,” he says. “I would submit that whether a company is making spice or newspaper or television, the companies that do the best, it does come back to you. It’s like life.”
Heston believes ownership rules have not affected the station over the years; instead, having a parent company has helped the station serve the public. Beyond providing news, Heston likes to point out that KSBW presents its opinion on local issues in newspaper-style editorials.
“We are the only station here that publishes an editorial,” he says. In recent weeks it has taken a position on the school superintendent, whether or not teens should be allowed in tanning salons, and the expansion of the Gallo Vineyard in the Salinas Valley. Heston notes that the editorials are local and not decided by a corporate headquarters elsewhere.
On the same note, Heston says his station relies on the resources of the parent company to broadcast news here. Hearst-Argyle is a multimedia company, a subsidiary of Hearst, which owns 12 daily newspapers around the country. Hearst, which publishes newspapers and magazines, bought Argyle Broadcasting and formed Hearst-Argyle in 1997, which runs 27 television stations, reaching 17 percent of the US public, according to the company. Without the parent company, Heston says KSBW might not be viable here.
“I think that in our area, there would not be an economic model, there would not be a reason to run a television station on a stand-alone basis. You would not have the input KSBW is able to have on the Central Coast area.”
As for the FCC hearing, KSBW broadcast the news that it would be held in Monterey soon after the announcement was made. Besides testifying, Heston says his crews will be there.
“We will cover this event as we’d cover any big story,” he says. “We will have live coverage of the hearing using our digital station.”
But for all the good he says his station does, Heston expects to hear some media criticism.
“I’m not Pollyanna-ish,” he says. “There will be a voice that will be very narrow, focused and shrill. But that doesn’t represent what good broadcasters are doing across America.”
Maybe so, but the Monterey-Salinas broadcast market has at least one aspect of troubling media ownership. Although the FCC does not say why it chose Monterey to serve as the venue for the entire West coast, there is some speculation that the high profile of one particular media conglomerate in a relatively small market drew the hearing.
In March 2002, Clear Channel—which already owned six local radio stations—was aiming to buy Ackerley Group, which held 18 television stations around the country.
In the Monterey/Salinas area, Ackerley was running KION (the local CBS affiliate) and, in a unique arrangement, also managing KCBA, the local Fox affiliate from the same studio.
Under old FCC rules, one company owning or managing two stations in the same community would have been illegal, but over years of deregulation it became possible.
Concerns about this media duopoly grew when it became clear that an even larger company might step in.
Rep. Sam Farr (D-Carmel) intervened. In a letter to the FCC he wrote, “I am very concerned that this de facto television duopoly has not served my constituents in Monterey well, and its combination with the largest radio operator in the market only threatens to make that situation worse.”
The deal was held up for review at the FCC.
At the time, Clear Channel’s head of television, William Moll, put a positive spin on it. He told the Weekly such arrangements create “synergy” in a given market and “opportunities to cross-promote events—to give a bigger voice.”
The deal went through in June 2002, over the objections of Farr and Buckley Broadcasting of Monterey, which runs KWAV-FM.
While running two affiliates out of the same studio may be good for Clear Channel, it may not be good for the public.
John Dunbar, director of the Telecommunications project at the Center for Public Integrity, a Washington, DC watchdog group, points out that while it may technically fit in the FCC ownership rule, “It’s contrary to the spirit of the rule.”
Whether or not the local public is well served by the new brand of conglomerated big media may be subjective and hard to define, but it’s of profound importance to the success of society. As any news editor or producer will admit, the news is what the media tells you it is. That said, the free flow of information is, as others have said, the lifeblood of democracy.
And just as a democracy lives or dies by responsible
citizens, it does so by responsible institutions. On July 21,
responsible citizens will be given the rare opportunity to
state for the record whether they are being served responsibly
both by their government and the media.