The Deseret News headline over the story on Congress' drive to overhaul the nation's telecommunications laws last week said, "House votes to break up monopolies."
Anyone taking that headline at face value would have some reason to rejoice. Unfortunately, it got only part of the story - and in the long term not the most important part.True, the bill seeks to free up competition in local telephone and cable companies, one effect of which will be to remove price controls in cable. But it also will speed up the swelling and apparently irreversible tide toward the creation of even bigger and fewer communications conglomerates, which already had a rush of water behind them with the deregulation movement of the early 1980s.
While technology is providing more and more "voices" or channels of communication, they are inclining into fewer and more powerful hands. President Clinton said the bills "promote mergers and concentrations of power" and he already has been shown to be right.
- A MAJOR REASON for the megabillion-dollar deals involving two networks, ABC and CBS, recently was Congress' drive to bring deregulation of the communications industries virtually to its ultimate.
Prohibitions on network ownership and syndication of shows already have been lifted.
All restrictions on the number of radio stations one company can own will be ended, and all on TV as well, except that no owner can have stations that reach more than 30 percent of the nation's population. (Some Republicans had pressed for 50 percent.) The House version also eases controls over how many media outlets one company could own in one market. More than 90 percent of American VHF stations in the 100 largest markets are in group ownerships; a generation ago chains owned about half.
Until 1982 radio-television ownership was bound by the "rule of sevens" that promoted diversity in ownership. One owner could hold only seven television, seven AM and seven FM stations. For example, KSL, which already had seven FM stations, had to sell off KSL-FM, now KSFI, years ago in order to buy another FM station in Dallas. The overhaul will now overturn the newer rule that one owner can hold 20 AM, 20 FM and 12 TV stations. Some other factors also affected the number, such as the number of stations owned in the market, signal overlap, audience share and minority ownership.
The congressional action on the massive (more than 200 pages in small print) bill, the first complete rewriting of the telecommunications law since 1934, came almost simultaneously with two blockbuster mergers in the entertainment world.
- DISNEY IS ACQUIRING Capital Cities-ABC Inc. in a $19 billion deal, the largest takeover ever in the media business. CapCities owns eight TV stations, plus 21 radio stations, two cable networks (A&E and ESPN) and has 225 network-affiliated TV stations, plus newspapers, magazines and books.
A day after Disney's coup Westinghouse Electric Corp. offered $5.4 billion to buy CBS. These two giants together own 15 television stations, more than allowed under the current law.
In a related action in the past month, Congress allowed Rupert Murdoch, the international media baron, to keep his Fox television network even though Fox exceeds federal limits on foreign ownership. Fox already owns eight TV stations and is asking FCC for its OK to buy another six.
OTHER MEDIA, which have not had government regulation of the sort imposed by the federal communication act, have long been going down the conglomeration/globalization path.
Gannett Co., already the largest newspaper chain in the country with 82 dailies, bought 11 more late last month with the $1.7 billion purchase of Multimedia Inc. The deal includes broadcasting properties.
The newspaper industry through the latter half of this century has been rushing toward control by the great chains. More than 80 percent of newspapers are in chain ownership, most of the once-independent newspapers in large cities are now chain owned, and they are often the only dailies in their respective towns. And the trend continues unabated. Perhaps because mergers have become so common, the Gannett buyout provoked only yawns.
Sound recordings are dominated by six big multinational companies, where megadollar deals also have become the norm. These include Sony, which acquired CBS Records in 1988; MCA, which Matsushita sold this year to the Seagram's distillery people; and the news and entertainment behemoth Time-Warner. Most of the innovation comes from the independents, with large-market companies being largely derivative, leading to a cultural homogenization.
- THE SAME COMPLAINTS are heard about book publishing. It once was considered a gentleman's club, dominated by many small family-owned companies. Now they are mostly part of big bottom-line-oriented multinational corporations. Doubleday, for example, is owned by Germany's gigantic Bertelsmann publishing group, HarperCollins by Murdoch, Macmillan by Maxwell communications and Wadsworth by the Thomson conglomerate, which is also one of the world's largest newspaper publishers.
Diversity has many virtues, to keep prices in line, discourage conformity, promote innovation, and allow a medium to be a watchdog over others. It is ominous to see conglomerates getting so much control over prices and content in the mass media.