More On The FCC’s Modest Deregulation Ruling

New Rules Give Big Media Chance to Get Even Bigger
Have you ever noticed how when consumer advocates are deploring something it always involves a lack of regulation? Not surprising since most of them are likely affiliated with Ralph Nader.

With their narrow view of communication it’s not surprising that the consumer advocates would be irritated over this development. What they aren’t considering is the diversity of news outlets available today, including the Internet. When a single blogger can get between 70,000 and 90,000 visitors a day — it obviously ain’t me — it becomes apparent we are dealing with a very diverse media market. The propeller heads at the FCC and consumer advocacy groups are worrying about 20th century media consolidation without considering all of the available alternatives. In fact, consolidation may be necessary for them to survive. That’s almost always the sign of a mature industry or one that’s in decline.

How people receive their news and entertainment in ten years is unknowable but you can safely assume it will be markedly different from how they receive it today.

As consumer advocates deplored yesterday’s changes to media ownership rules as a blow to democracy, investors bought up shares of the biggest media companies.

Both advocates and investors agree that the latest rule changes are likely to let media leviathans like the News Corporation and Viacom fortify their positions while increasing the odds against newcomers and small fry.

The changes mainly loosen restrictions on the ownership of local television stations. But even in the one area — the radio industry — where the Federal Communications Commission tightened the rules on media consolidation, the changes will have the unintended effect of making it more difficult for smaller rivals to challenge the dominance of the industry giant, Clear Channel Communications.

To curtail the swift consolidation of radio broadcasting since its deregulation in 1996, the commission set new limits on the maximum number of stations one company can own in certain cities and towns. The new rules will impede Clear Channel’s future expansion. But at the same time, the commission let Clear Channel keep its clusters of stations that exceed the new caps, preventing its smaller competitors like Cumulus Media and Citadel Broadcasting from ever catching up.

Citadel had sought rules that would force it to sell some of its approximately 200 stations, in the hopes of forcing Clear Channel to shed some of its 1,200.

“Whether you call it revolution or evolution, the big companies now have the opportunity to be even bigger and stronger,” said Blair Levin, a former top official for the commission who is now an analyst at the investment bank Legg Mason.

“Everyone in the business has to wake up tomorrow and ask, Do I want to be a buyer or a seller? In a relatively condensed time frame — three or five years — there will be a pretty large turnover in the way the map looks,” Mr. Levin said.

Together with recent deals like News Corporation’s proposed acquisition of the satellite broadcaster DirecTV, the changes may create opportunities and pressures for more mega-mergers.

In a little-noticed shift, the commission declined to reinstate a rule that blocked cable companies from owning local television stations.

When news outlets can be fact checked in real time — via the blogosphere — who really cares how big they get?

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