The Dangers of Deregulation

Secretary of State Colin L. Powell has plans to attack Iraq. His son, Federal Communications Commission (FCC) Chair Michael Powell, has plans to attack media regulation. In a vote Powell scheduled for this spring, the FCC will address a proposal to relax federal limits on ownership and consolidation of television, radio, newspaper and internet media. But to deregulate would be a terrible move. Under the current regulatory regime, there are limits to the proportion of broadcast outlets a single company can own in any particular market. While national networks such as NBC and CBS provide content across the country, the individual broadcasting stations are privately owned and merely subscribe to or affiliate with networks.

Relaxing these ownership rules would open the door to massive consolidation in the media sector. A small number of already-large companies would be able to buy out smaller broadcasters, vertically integrating the production and distribution—both locally and nationally—of broadcast content. In doing so, control of content in many of the nation’s media markets would be concentrated in the hands of a few large companies. Such consolidation is dangerous for several reasons.

Most sinister is the threat that oligarchic control of the media, which could potentially suppress accurate or independent journalism and related public dialogue. Fewer independent news sources mean fewer independent viewpoints in our news and editorial content. In such a world, manipulation of the public would be a much more prevalent concern.

Less sinister than such threats, but more persistent and pervasive, is the danger of cultural homogenization of content brought about by the loss of local control. Experience with limited deregulation in radio ownership should serve as a warning to the FCC not to deregulate other media. Since ownership restrictions in radio were relaxed in 1996, several large national corporations have snapped up local radio stations in droves. Clear Channel Communications, for example, now owns over 1,200 local radio stations across the nation.

These large conglomerates use their muscle to establish sweetheart deals with major advertising clients, securing revenue—even if their programming is less popular or worthwhile than that of a station under local ownership. Classical music, for instance, went off the air in Miami after the then-current classical FM station was bought out by the Cox conglomerate, which changed the station’s format to techno music. After a year-and-a-half, classical is back on the Miami airwaves—to the pleasure of many devoted listeners—on an locally owned AM channel. Should the new channel be bought out, however, classical music might again disappear from the city—this time forever.

The broadcast spectrum is a finite public good. There are only so many stations that can exist on the spectrum allotted to commercial radio and television in any given area. Unlike a perfectly open market, where dissatisfied consumers can turn to a new provider in search of the product they want, there is simply no room on the radio dial for startup or breakaway radio stations to form should an existing monopoly alienate the consumer. As such, it is entirely reasonable for the government to regulate this commodity and restrict consolidation in this industry.

While the First Amendment guarantees the right to free speech, government regulation of traffic over our airwaves is acceptable. In this instance, regulations serve to increase the diversity and independence of our outlets of mass communication, enriching the listening and viewing public. Removing these regulations would only serve to enrich major media moguls and conglomerates, while impoverishing the rest of us.