[DMCA-Activists] Copps on Media Deregulation

[Seth Johnson]

> http://www.fcc.gov/Daily_Releases/Daily_Business/2003/db0602/DOC-235047A9.pdf

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STATEMENT OF
COMMISSIONER MICHAEL J. COPPS,
DISSENTING

Re:     2002 Biennial Regulatory Review – Review of the Commission’s Broadcast 
Ownership Rules and Other Rules Adopted Pursuant to Section 202 of the 
Telecommunications Act of 1996

I dissent to this decision.  I dissent on grounds of substance.  I dissent on 
grounds of process.  I dissent because today the Federal Communications 
Commission empowers America’s new Media Elite with unacceptable levels of 
influence over the media on which our society and our democracy so heavily 
depend.

This morning we are at a crossroads – for the Federal Communications 
Commission, for television, radio, and newspapers, and for the American people. 
 The decision we five make today will recast our entire media landscape for 
years to come.  At issue is whether a few corporations will be ceded gatekeeper 
control over the civil dialogue of our country; content control over our music, 
entertainment and information; and veto power over the majority of what we and 
our families watch, hear and read.

Two very divergent paths beckon us forward.

Down one road is a reaffirmation of America’s commitment to local control of 
our media, diversity in news and editorial viewpoint, and the importance of 
competition.  This path beckons us to update our rules to account for 
technological and marketplace changes, but without abandoning core values going 
to the heart of what the media mean in our country.  On this path we also 
reaffirm that FCC licensees have been given very special privileges and that 
they have very special responsibilities to serve the public interest.

Down the other road is more media control by ever fewer corporate giants.  This 
path surrenders to a handful of corporations awesome powers over our news, 
information and entertainment.  Here we treat the media like any other big 
business, trusting that in the unforgiving environment of the market, the 
public interest will somehow magically trump the urge to build power and profit 
for a privileged few.  On this path we endanger time-honored safeguards and 
time-proven values that have strengthened the country as well as the media.

So the stakes are high – higher than they have been for any decision the five 
people sitting here today have ever made at this Commission. How do we decide 
which path to choose?

I start with three principles.  First, look at the law and see what Congress 
instructs us to achieve.  Second, look at practical, real world experience 
rather than cling to some prefabricated mind-set or ideology.  And third, when 
faced with the automatic consequences that will follow such a far-reaching 
decision, act cautiously rather than rashly, and trust in the wisdom of the 
American people.

What does the law tell us?  The Communications Act tells us, very clearly, to 
use our rules to promote the public interest, and to that end, for decades we 
have promoted the goals of localism, diversity and competition.  The statute 
tells us that the airwaves belong to the American people, and that corporations 
are given a temporary right to use this public asset only in return for their 
pledge to use it in the public interest.  No broadcast station, no company, no 
single individual owns an airwave in America; the airwaves belong to all the 
people.  The law tells us that the last time Congress legislated on this topic, 
it thought that restrictions on how big a single media corporation could get 
and how much power one company could amass were important and necessary.  And 
the Supreme Court has upheld media protections, stating that “it is the purpose 
of the First Amendment to preserve an uninhibited marketplace of ideas in which 
truth will ultimately prevail, rather than to countenance monopolization of 
that market, whether it be by the Government itself or a private licensee.”  
Finally, on the larger issue of media power, Judge Learned Hand instructed us 
that “The hand that rules the press, the radio, the screen, and the far-spread 
magazine, rules the country.”  His words remain true today.

What practical, real world experience do we have to guide us?   Radio 
deregulation gives us powerful and relevant lessons.  When Congress and the 
Commission removed some of the radio concentration protections, we experienced 
massive, and largely unforeseen, consolidation.  Very quickly after taking 
actions for radio like those we will take today for television and newspapers, 
there was a 34 percent reduction in the number of radio station owners.  
Diversity of programming suffered.  Homogenized music and standardized 
programming crowded out local and regional talent.  Creative local artists 
found it evermore difficult to obtain play time on the air.  Editorial opinion 
polarized.  Competition in many towns became non-existent as a few companies -- 
in some cases a single company -- bought up virtually every station in the 
market.  This experience should terrify us as we consider visiting upon 
television and newspapers what we have inflicted upon radio.  “Clear 
Channelization” of the rest of the American media will harm our country.

What about seeking out the counsel and trusting in the wisdom of the American 
people?  Begin by realizing that every American has a stake in this decision.  
Every American, not just the companies that have temporary license to use the 
public’s spectrum.  Commissioner Adelstein and I have attended public hearings 
in many cities across the country.  We have met with conservatives and 
liberals, broadcasters and creative artists, concerned parents and civil rights 
activists, church leaders and educators.  Our Commission has seen a flood of 
opinions from every state in the nation.  Close to three quarters of a million 
people have registered their views now – more than for any proceeding in 
Commission history.  And in a nation that can be deeply divided on important 
issues, these citizens are almost unanimous on the question of whether this 
Commission should allow further media concentration.  They are imploring us to 
protect local broadcasting, diversity of programming and opinion, and the 
ability to compete with the huge companies.  We should heed their conservatism 
– their urgent call to refrain from abandoning time-honored protections when so 
much is at stake and so much is unknown about the consequences of what we are 
doing here today.

The majority instead chooses radical deregulation – perhaps not quite so 
radical as originally intended a year ago before so much pressure was brought 
to bear upon them – but radical nevertheless.  This decision allows a 
corporation to control three television stations in a single city.  Why does 
any corporate interest need to own three stations in any city, other than to 
enjoy the 40-50 percent profit margins most consolidated stations are racking 
up?  What public interest, what diversity, does that serve?  This decision also 
allows the giant media companies to buy up the remaining local newspaper and 
exert massive influence over some communities by wielding three TV stations, 
eight radio stations, the cable operator, and the already monopolistic 
newspaper.  What public interest, what new competition, is enabled by 
encouraging the newspaper monopoly and the broadcasting oligopoly to combine?  
This decision further allows the already massive television networks to buy up 
even more local TV stations, so that they control up to an unbelievable 80 or 
90 percent of the national television audience.  Where are the blessings of 
localism, diversity and competition here?   I see centralization, not localism; 
I see uniformity, not diversity; I see monopoly and oligopoly, not competition.

Take away the protections against concentration that still remain and one 
company could dominate a region’s access to information by controlling its 
radio stations, television stations, newspapers and cable system.  Where once 
it was commonplace to have two, three, or more daily newspapers in a city, 
today most communities are one-paper monopoly towns.  Local broadcast 
television and radio are both concentrated oligopolies in communities across 
this country.  And the story is not much better on a national level.  The 
conglomerates that own the networks control 70 percent of the prime-time 
audience.  Their audience share of television households is approaching – and 
could soon surpass according to analysts – the share the three networks had 
during the 1960s and 1970s.  And today, those conglomerates are more vertically 
integrated, controlling the production of most of their programs as well.

What about the vaunted 500-channel universe of cable TV saving us?  Well, 90 
percent of the top cable channels are owned by the same giants that own the TV 
networks and the cable systems.  More channels are great.  But when they’re all 
owned by the same people, cable doesn’t protect localism, editorial diversity, 
or competition.  And those who believe the Internet alone will save us from 
this fate should realize that the dominating Internet news sources are 
controlled by the same media giants who control radio, TV, newspapers, and 
cable.  So, how does it promote localism, diversity and competition to allow, 
as we will allow by our action today, more media concentration in the more than 
175 markets with over 90 percent of the American population?

If we were just starting down the road to media concentration, maybe we could 
have a different kind of discussion today.  But we have already traveled 
dangerously far down that road, and the need now is to slow the headlong rush 
to media monopoly until someone can prove it is taking the media, and the 
country, anywhere worth going.  This is a huge and foolhardy gamble with the 
future – every American’s future.

Let us remember that this is only the latest, most radical step in a 
twenty-year history of undermining the public interest.  Step by step, rule by 
rule, bit by bit, we have allowed the dismantling of public interest 
protections and given a green light to the forces of consolidation, until now a 
handful of giant conglomerates are in the saddle.

The Commission has allowed fundamental protections of the public interest to 
wither and die – requirements like ascertaining the needs of the local 
audience, the Fairness Doctrine, teeing up controversial issues, providing 
demonstrated diversity in programming, ensuring decent quality programming for 
our children, to name a few of the safeguards we had once but have abandoned.

At the same time, the Commission has pared back its license renewal process 
from one in which it examined whether the broadcaster was actually serving the 
public interest to one where companies need only send us a postcard every eight 
years and nothing more.  Unless there is a major complaint pending against a 
station, the license is almost automatically renewed.

The Commission cut back on its structural regulations that limited both 
horizontal (or distributional) concentration and vertical (or production) 
concentration, so that the same network distributing programs increasingly 
owned them. The worst monopolies in American history were built on this model.  
Then the Commission went further, eliminating outright the vertical safeguards 
that protected against a few conglomerates controlling all of the creative 
entertainment that we see.

Over the years, the Commission has dismantled all of these provisions and more, 
relying instead on marketplace forces as a proxy for serving the public 
interest.  Along the way, make no mistake about it, localism, diversity and 
competition suffered grievous wounds.  Worse, the heart and soul went out of 
much of our media.  And we are left with only the current rules governing 
control of ownership structure as a means to safeguard our public interest 
obligations.  They can’t do the job by themselves, even if we were to keep them 
as they are.  By emasculating them today, we only make the problem worse.  And 
by neglecting to do justice to proposals that could supplement our ownership 
rules, such as requiring more independently produced programs and enforcing 
real public interest performance standards on our stations, we come perilously 
close to taking the “public” out of the public airwaves.

Don’t tell me that those of us who feel strongly about this are being too 
emotional or are laying too much on one set of decisions.  Some would have us 
believe that this is merely an ordinary examination of our rules that we 
conduct every two years.  Let’s not kid ourselves.  This is the granddaddy of 
all reviews.  It sets the direction for how the next review will get done and 
for how the media will look for many years to come.  As for the emotion, I have 
seen the concern, the deep feeling and outright alarm on the faces of people 
who have come out to talk to Commissioner Adelstein and me all across this 
broad land.  Are they emotional?  You bet.  And I think they are going to stay 
that way until we get this right.

I.      The Commission’s Decision-Making Process and Record Development Was     
Deeply Flawed.


Good, sustainable rules are the result of an open administrative process and a 
serious attempt to gather all the relevant facts.  Bad rules and legal 
vulnerability result from an opaque regulatory process and inadequate data.  
Unfortunately, today’s rules fall into the latter camp.

The Commission launched this biennial review proceeding in September 2002.  I 
went into this last year believing that if the Commission really worked at it, 
got around the country looking at various markets, talking to people, 
collecting data and really reaching out, we had a shot at building an adequate 
record for today’s vote.

Unfortunately, we have not succeeded.  I am concerned that this proceeding has 
been run as a classic inside-the-Beltway process with too little outreach from 
the Commission and too little opportunity for public participation in this 
far-reaching review of critical media concentration protections.  This is the 
way the Commission usually does business, we are told.  Well, I submit this is 
too important to be treated on a business-as-usual basis.

Let’s look at the facts.  In October, we released the results of a dozen 
FCC-sponsored studies.  We gave commenters a mere 60 days to analyze the six 
separate media consolidation rules and to sift through the twelve studies.  A 
number of these studies are incomplete and contested, criticized because of 
allegedly faulty methodologies and unwarranted conclusions.  Yet today’s item 
returns to them again and again, according them what I believe is more 
deference than merited, to the exclusion of other expert studies.  I criticize 
the studies no more than the Commission’s operating premise that in this 
far-reaching rulemaking that will affect tens of billions of dollars in 
industry business, we could understand its implications and its consequences 
through  a small number of meagerly financed inquiries that ignored many of the 
most critical questions.

I was also saddened last Fall that we failed to open our own studies to public 
scrutiny by not releasing the methodology or underlying data, notwithstanding 
that some of the studies were based on proprietary data that parties criticized 
as being created for and manipulated by the media industry.  Finally, a month 
later, while the clock for comments continued to run, we provided limited 
release of the underlying data, but only to those who could come to our 
headquarters in Washington, D.C.  Requests for further extensions of time to 
assess these studies and provide additional record data were denied.

We then sought to promote the broader national dialogue and debate that these 
issues so clearly merit.  Proceeding on an assumption that all expertise does 
not reside within the Beltway, I sought to have the Commission hold a series of 
forums and roundtables around the country that would include significant input 
from both traditional and non-traditional stakeholders.  After an initial flat 
denial we were given only one official hearing, and it was less than 100 miles 
outside the Beltway in Richmond, Virginia.

That was a start, but at the time we held that hearing, a survey indicated that 
three-quarters of all Americans were not aware that this critical issue was 
being decided at the FCC.  We had not told them, nor had Big Media told them.  
I sought additional hearings and forums.  Again, no success.   I sought 
resources to hold my own hearings and to attend forums.  Again, requests for 
both staff assistance and funding were denied.

Using my limited office resources, I have traveled across the country to attend 
as many hearings and forums as I could.  I commend Commissioner Adelstein for 
his very active participation in this hearing process.  Between us, we have 
held hearings and attended forums in New York, Seattle, Austin, Durham, 
Phoenix, Chicago, Burlington, San Francisco, Los Angeles, Philadelphia, Marin 
County, Detroit and Atlanta.  All told, there have been over a dozen gatherings 
to discuss media ownership.

With resources and institutional dedication, a full-fledged process involving 
more Commissioners could have given us the information and insight needed to 
craft rules that both took account of technological and market changes and 
fulfilled our responsibility to protect localism, diversity and competition.  
But we had too few resources and too little dedication.  So, we are left, 
unsurprisingly, without the record or new ideas we need to do our job well.

More recently, the Commission has even refused to publicly disclose the rules 
we are voting on today.  What possible harm come from transparency?  How can 
telling Congress and the public what we plan to do possibly be bad?  I see no 
legitimate purpose for casting our votes in a shroud of secrecy except to 
insulate the FCC from public scrutiny.

Therefore, Commissioner Adelstein and I sought to have the specific proposals 
put out for public notice and comment.  We believed that the country would be 
much better served by putting the proposals out for comment for a limited 
period, say 60 or 90 days, so we could get it right, understand the 
consequences of the new rules (both the intended consequences and those 
invariably more troubling unintended ones) and let these ideas bathe in the 
sunshine of national debate.  Such discussion would have the important 
additional benefit of enhancing the sustainability of any Commission decision 
in court by providing concrete input, analysis, and testing on specific 
proposals.  Sound policymaking, perhaps even the law, requires no less.  But 
the request was denied.

When a draft proposal, not including the proposed text of the new rules 
themselves, was circulated to Commissioners a mere three weeks before today’s 
vote, we formally requested that the Commission postpone today’s meeting to 
provide additional time to study more thoroughly the impact of the proposals 
and their interplay, and to see if common ground could be found.  Under 
long-standing Commission practices, such requests from Commissioners have 
generally been honored.  That request was also denied.

And so, we arrive at today.  Citizens across this country will hear for the 
first time the proposals that we are adopting.  Some of the details of the rule 
changes have leaked to the press.  Even with this incomplete information, the 
public reaction against the proposed changes has been unlike anything the FCC 
has ever experienced.  This proceeding has generated three-quarters of a 
million comments now – more than any other proceeding that I am aware of in the 
history of the FCC.  Of those comments, all but a few hundred are from 
individual citizens.  And of those, nearly every one opposes increased media 
consolidation – over 99.9 percent!

We’ve heard bipartisan concern from more than 150 Members of Congress, 
including the Congressional Black Caucus, Congressional Hispanic Caucus, and 
the Congressional Asian Pacific American Caucus, asking us to slow down and put 
these proposals out for public comment before we vote.  Some of those Members 
of Congress are here today.

Dozens of organizations have weighed in with their concerns about media 
concentration.  Among others, we have heard from Children Now, the Writers 
Guild of America, the Parents Television Council, the Communications Workers of 
America, AFTRA. the National Association of Hispanic Journalists, the National 
Association of Black Journalists, the Conference of Catholic Bishops, the 
Center for the Creative Community, Common Cause, the American Civil Liberties 
Union, the National Rifle Association, the American Civil Liberties Union, the 
National Organization for Women, the Family Research Council, the National 
Association of Black Owned Broadcasters, Rainbow Push, the Media Access 
Project, Consumers Union, the Consumer Federation of America, Move On, the 
Center for Digital Democracy, United Church of Christ, the Minority and Media 
Telecommunications Council, the Leadership Conference on Civil Rights, and 
many, many more across a broad political and geographic spectrum.  City 
councils across this country in such places as Chicago, Seattle, Philadelphia, 
San Francisco, Atlanta, and Buffalo, as well as a whole state -- Vermont -- 
have gone on record against media concentration.  Note, please, that several of 
these are cities where Big Media would have us believe that all is well with 
the consolidation they have introduced.

As Brent Bozell of the Parents Television Council so aptly put it, “When all of 
us are united on an issue, then one of two things has happened.  Either the 
Earth has spun off its axis and we have all lost our minds or there is 
universal support for a concept.”  Well, it’s the concept – a transcending, 
nationwide concept.  This issue is not Republican or Democratic.  It is not 
liberal or conservative.  Not North or South.  Not young or old.  It is an 
all-American issue.

The FCC is not, of course, a public opinion survey agency.  Nor should we make 
our decisions by weighing the letters, cards and e-mails “for” and the letters, 
cards and e-mails “against” and awarding the victory to the side that tips the 
scale.  But even this independent agency is part of our democratic system of 
government.  And when there is such an overwhelming response on the part of the 
American people and their representatives in Congress assembled, we ought to 
take notice.  Here the right call is to take these proposals, put them out for 
comment and then -- only then -- call the vote.  Plausible arguments have been 
put forward that the letter of the Administrative Procedure Act requires this.  
Other legal experts demur.  I do know this: the spirit underlying notice and 
comment is that important proposed changes need to be seen and vetted before 
they are voted.  Today we vote before we vet.

Now the only opportunity all these concerned citizens have to comment on the 
specific rules is to file reconsideration petitions after the decision is 
already made.  Given that such petitions are unlikely to be resolved for 
months, the impact of this decision by then will likely be irreversible.  In 
such a situation, we ought to establish a longer timetable and procedure for 
implementation of these changes to the rules, just as the Commission did when 
it dismantled the financial interest and syndication rules a decade ago.  Such 
a procedure would allow the Commission to consider petitions for 
reconsideration on these specific rules to protect against irreversible, 
unintended and unforeseen negative consequences.  This would also allow the 
Commission to examine its proposed rules and determine if additional measures 
are needed to protect the public interest before consolidation occurs, and it 
would allow Congress opportunity for any input that it may deem appropriate.

II.     The Record Does Not Support the Majority’s Decision To Undermine Media 
Concentration Protections.

In reviewing our first biennial review, the D.C. Circuit faulted the Commission 
for its failure to provide an adequate explanation for its rules.  Importantly, 
the court did not indicate that a relaxation of the concentration limits is 
warranted or required.  On the contrary, the Commission could choose, if so 
inclined, to tighten its ownership rules.  What the court demands is that the 
Commission provide more analysis and empirical data to justify the rules it 
adopts.  And I do not believe the courts want only granular, data-driven 
justifications; I think they would welcome justifications more deeply grounded 
in history, macroeconomics, political theory and the philosophy of democratic 
government.  In any event, we are obligated to present reasoned rationales with 
more compelling explanations than we have thus far presented.  But we are not 
instructed to radically restructure the rules.

My overarching reaction to the record before us is this: first, the evidence we 
have gathered does not justify such loosening of the rules as the majority 
approves today and, secondly, we have not asked a sufficiently diverse range of 
questions to do justice to so important a public issue.  The evidence we have 
amassed points to the need for maintaining existing media concentration 
protections.

The court was particularly troubled by inconsistencies in our previous 
decisions.  Yet, in this Order, the majority once again fails to provide 
coherence and internal consistency to the rules and rationales we adopt.  I am 
concerned that these inconsistencies will undermine the decision on appeal and 
will open the decision to the charge that it was made to reach the result 
sought by companies that want to consolidate.  I provide below a few examples 
of these inconsistencies.

A.      The Majority Ignores the Lessons of Radio Concentration.

In 1996 Congress and the FCC eliminated the national cap for radio 
concentration.  Over the years the Commission has loosened its local radio 
concentration rules so that one corporation can now own up to eight stations in 
a market.  These deregulatory changes provide the FCC with a record to study 
the impact of fewer media concentration protections on localism, diversity and 
competition.

The largest company owned less than 75 stations before deregulation.  Today one 
company, Clear Channel, owns more than 1,200 stations.  This company owns eight 
stations in many cities, and in some towns owns virtually all the stations 
available.  The number of radio station owners has decreased by an incredible 
34 percent since 1996.  The number of minority owners has dropped by a 
shocking, and nationally embarrassing, 14 percent.  A Future of Music Coalition 
study shows that music has become more homogenous and that many stations are 
now programmed by computers hundreds of miles away rather than by local DJs, 
leaving no local content.  In our hearings around the country, Commissioner 
Adelstein and I have talked to many capable young musicians and creative 
artists who are simply unable to secure air time in the new consolidated radio 
environment.  Real news radio is dying outside the largest cities, and 
viewpoint diversity has given way to a constant drumbeat of one-sided talk 
shows.

Even supporters of today’s decision have been heard to say that the state of 
radio is troubling – yet the Commission charges ahead to deregulate TV and 
newspapers without comprehensively studying the results of radio concentration. 
 The failure to do so ignores critical information that is both relevant to 
these rules and that suggests the rules we vote on today are a mistake.

Even worse, although the majority claims it is taking steps to limit radio 
concentration, in fact the majority today launches a new round of consolidation 
in radio.  First, the majority eliminates the radio/TV cross-ownership rule 
which limited the number of commercial radio and television stations one 
company could own in a market.  Without these cross-ownership limits, companies 
can expand their reach even further.  In addition, in the name of helping small 
businesses, minorities, and women, the majority creates a huge new loophole for 
consolidation above even the limits set today.  The majority grandfathers any 
clusters that are above the caps.  It further allows a company to transfer 
those licenses to a small business.  After only three years, the majority 
allows the small business to sell those stations to anyone else without 
restriction -- even if it is to Clear Channel or some other giant media 
conglomerate.  This decision will encourage a regulatory shell game that 
threatens to make a mockery of the radio limits.

B.      The Decision To Raise the National Ownership Cap to 45 Percent is 
Arbitrary.

Current protections limit TV networks to controlling 35 percent of the national 
TV audience.  Today we increase this limit to 45 percent, encouraging what 
Merrill Lynch calls a “Gold Rush” of acquisitions of local stations by the big 
four networks.  The Communications Act insists that the Commission protect 
localism, diversity and competition.  In reviewing the last biennial review, 
the D.C. Circuit held that diversity and localism are valid public interest 
goals and that the Commission could determine that the national ownership cap 
is necessary in the public interest if it serves either interest.  The court 
held, however, that the Commission had failed to provide sufficient evidence 
that either objective was served.  The majority today correctly determines that 
a national cap is needed to serve the statutory goal of having independently 
owned affiliates continue to serve local community needs and to act as a 
counter-balance to the national networks.  The majority, however, arbitrarily 
determines that the cap should be raised from 35 percent to 45 percent without 
adequately justifying this new number, seeking comment on this specific number, 
or presenting their rationale for arriving at it.  The courts may exact a heavy 
toll on the majority for these omissions.

The National Association of Broadcasters, the Network Affiliated Stations 
Alliance, and other parties favoring retention of the 35 percent cap submitted 
exhaustive and largely uncontested evidence including economic studies, station 
surveys, in-depth analyses, and numerous market-specific examples to justify 
retention of the 35 percent cap.  The record evidence demonstrates, among other 
things, that independently owned affiliates are better able to preempt network 
programming networks based on community standards and needs; that the 35 
percent cap ensures a critical mass of affiliates necessary to perform this 
role effectively; and that a substantial majority of affiliates are 
experiencing increasing pressure from the networks not to preempt network 
programming.  Yet, the majority largely ignores this evidence and arbitrarily 
chooses a number that tips the balance further in favor of the national 
networks and away from the local stations.  The majority fails to explain how a 
45 percent cap – in reality a 90 percent national cap with the illogical UHF 
discount as discussed below – meets Congressional goals.

The majority justifies an increase in the cap to 45 percent based on the 
assertion that affiliates preempted networks with a national reach of over 35 
percent as often as those with less than 35 percent.  It does so without 
accounting for the weight of evidence in the record that supports retaining the 
35 percent cap.  The majority further reasons that the 45 percent cap could 
accommodate all existing combinations.  But this goal could have been met with 
a 40 percent cap as well.  Yet the majority concludes that it needs to allow 
conglomerates to grow further without any explanation for this particular 
number.  I repeat:  the prospects for successful judicial scrutiny are not well 
served by this approach.

Some have argued that the only way to preserve free over-the-air television is 
to let the big conglomerates get even bigger.  Unless we allow even more 
concentration, the argument posits, over-the-air television is doomed.  I find 
the arguments regarding the networks’ financial distress to be far-fetched, 
more likely totally ludicrous.  The facts tell such a different story.  The 
networks, with their ability to deliver a large number of viewers across the 
country, have become even more valuable.  They not only reach consumers over 
the air through their own highly profitable stations and through affiliates, 
but they are also guaranteed carriage to cable subscribers.  Indeed, they own 
much of cable. The record demonstrates that the top four networks maintain the 
greatest reach of any medium of mass communications.  I find no convincing 
evidence in the record of network poverty or financial distress.  Although it 
is difficult to break out a precise measure of one part of these large 
conglomerates’ operations, it is clear that their broadcast operations are 
profitable.  Moreover, the network operations enhance the profitability of 
other parts of the conglomerate.  The Commission itself recently concluded 
that, “Broadcast television is certainly a survivor, even a vigorous survivor.” 
  The networks command an enormous advertising premium.  They recently received 
a record $9.4 billion in up-front prime-time advertising for the next season.  
They have ownership in most of their profitable programs, and these are 
subsequently put into syndication or “repurposed” – the fancy new term for a 
re-run.  These companies know how to move costs around, shift assets and make 
things look good or bad as they need to do for various audiences.  Sometimes 
regulators hear a very different story than Wall Street analysts hear.  I 
believe the argument that the only way for the less well-off among our citizens 
to continue receiving free, over-the-air television is through allowing already 
powerful networks to grow more powerful would have been better left unsaid.

I would add a point on the much-touted economies of scale and the alleged 
efficiencies of bigness, because it may be that the networks do have a 
longer-term reason to worry.  This country has witnessed the unraveling of huge 
mega mergers and acquisitions across economic sectors during the past couple of 
years, while other such ventures are struggling to make it.  We should have 
learned by now that size is no guarantor of success, even though the urge to 
grow larger continues to motivate so many industries.  Suppose we whittle down 
the media world to an even more precious few, and some of these begin to 
implode like other huge deals have imploded.  Talk about stations going dark!  
Talk about striking at the heart of the country!  Sometimes I think the 
networks need to be protected from themselves.

C.      Maintaining the 50 Percent UHF Discount In the Face of Technological 
and Marketplace Changes Is Arbitrary.

Understanding the so-called “UHF Discount” is critical to understanding how the 
new 45 percent cap will actually work.  Under the UHF Discount policy, UHF 
stations are considered to reach only 50 percent of the households that a VHF 
station reaches in a market for purposes of determining whether a company has 
exceeded the national ownership cap.  When established in the mid-1980’s, this 
discount was designed to take into account the technical limitations of 
over-the-air UHF stations.  The Commission found that over-the-air UHF stations 
reached fewer viewers than VHF stations because their signals were different 
and weaker.  But UHF and VHF stations reach an identical number of viewers when 
delivered over cable TV facilities.  The differences between UHF and VHF only 
manifest themselves when they are broadcast over the air.  Why didn’t the 
Commission consider this in the 1980’s?  Because at that time cable penetration 
was only around 35 percent, so the vast majority of Americans received their 
television signals over the air.  Today over 85 percent of consumers receive 
their signals from cable and DBS.  Cable signal carriage rules ensure that 
consumers receive the UHF signal, and DBS operators are required to carry all 
UHF stations in any market where they carry any local channel.  According to 
the record, these changes in the market are reflected in the valuations of UHF 
licenses which are approximately 10-15 percent less than VHF licenses with 
similar affiliations.  Indeed, the Commission itself in previous proceedings 
has recognized that the growth of Multichannel Video Programming Distributor 
(MVPD) subscribership has reduced the UHF signal handicap.

With 85 percent of Americans experiencing no difference between UHF and VHF 
stations, the discount no longer makes sense.  Eliminating the entire discount 
may be warranted, but at a minimum it requires replacement with a number that 
reflects the reality of today’s technology and marketplace.

Notwithstanding the majority’s repeated admonishments that the Commission must 
take into account changes in the marketplace and in technology and must provide 
empirical data for the rules it adopts, the majority inexplicably, and I 
believe wrongly, retains the UHF discount in its present form without 
performing the comprehensive review that is required.

Adding to the inconsistency in this decision, when the majority conducts its 
analysis of the cross-ownership and local television rules, it counts the 
number of television stations in the market.  All stations – whether UHF or VHF 
-- are counted equally in this analysis and assumed to be available throughout 
the market.  How can it be that, in one part of the decision, UHF stations are 
determined to reach the entire market, and in another part of the same 
decision, those stations are determined to reach only half the households?

Eliminating or changing rule after rule to allow further consolidation on the 
basis of changed technology and market conditions, yet refusing to change the 
one rule that the networks approve will lead many to believe that this decision 
is results-oriented, that it is designed to ensure that no station group 
exceeds the national cap, and that conglomerates may continue to grow no matter 
what technological or marketplace changes may occur.


III.    The Majority’s Rules and Reasoning are Arbitrary and Inconsistent.

As described above, I believe that the majority has made serious errors in its 
high-level decisions to restructure media concentration protections.  It is 
also important to recognize that when one digs into the details of today’s 
action, it becomes clear that it is riddled with arbitrary decisions and 
inconsistencies.  I describe a few of them here.

A.      The Majority Protects Against Mergers of the Top Four Television
Stations in a Market but Inconsistently Allows a Monopoly
Newspaper To Purchase Even the Top Television Station.

In the local television ownership rule, the majority recognizes that a single 
entity can achieve excessive market power through consolidation.  The majority 
therefore precludes one company from owning two of the top four television 
stations in a market.    The majority further treats news sources as 
interchangeable in its “Diversity Index” that counts different media news 
outlets available to consumers.  Yet, although the majority constrains two of 
the larger local news voices in the market from combining in the local 
television rule, the majority arbitrarily provides no similar constraints in 
its cross-ownership rules.  The Order allows a newspaper – clearly a 
significant news voice in the market – to purchase one of the top four 
television stations, thereby potentially harming consumer welfare and 
eliminating a voice just as surely as allowing two of the top four stations to 
merge.  The majority does not explain this inconsistency.  Nor does it explain 
how allowing a newspaper with say 80, 90, or even more of the circulation in a 
community to merge with the top station in that market would help a smaller 
newspaper or television station survive.  Indeed, such a merger could allow the 
creation of a dominant news outlet in the market against which no other entity 
could compete.  Yet, the majority does not explain how eliminating one strong 
local news voice through consolidation will benefit diversity, localism or 
competition in that market.

An additional problem concerns the majority’s method of counting news voices in 
the market.  The Diversity Index counts television, newspapers, radio, and the 
Internet as local news outlets.  It weighs television most heavily, and gives 
Internet sites the least weight, based on where consumers actually obtain their 
news.  The majority, however, then counts all outlets within a medium equally 
in assessing the level of consolidation allowed.  This inconsistency between 
using actual news sources in one part of the Diversity Index and potential news 
sources in another leads the majority to count a television shopping channel as 
heavily as a station with local news programming when assessing news outlets 
within a community.  In sum, the majority bases its Diversity Index on where 
consumers supposedly obtain news, but then arbitrarily allows cross-ownership 
based on all television stations, not just those providing news.

B.      The Majority Inconsistently Accepts “Highly Concentrated” Markets
and Arbitrarily Treats All Television Stations as Equals.

In its local television ownership rule, the majority allows one entity to own 
three stations when there are at least 18 stations in the market.  The majority 
reasons that requiring 18 stations will preserve at least six independent 
voices and therefore, ensure the market is at most moderately concentrated.  
The Merger Guidelines of the U.S. Department of Justice and the Federal Trade 
Commission categorize any market with fewer than the equivalent of 10 
equal-sized independent entities as “concentrated,” and any market with fewer 
than 6 such entities as “highly concentrated.”

But the new rules go even farther, permitting even more concentration by 
allowing duopolies in markets with as few as five stations.  Thus, broadcast 
television in many markets across the country may be highly concentrated.  
Moreover, given that all stations do not provide local news, the market for 
broadcast television newscasts will be even more highly concentrated.  The 
majority does not take account of this fact.

Why does the majority believe that allowing concentrated local markets is 
acceptable?  Why does it believe that allowing even highly concentrated markets 
is acceptable in markets with 5 to 6 stations?  Why does it treat all TV 
stations as equals, from the Home Shopping Network to the local NBC station, 
whether or not they have local news?

A similar problem of concentration occurs in the context of the local radio 
rule.  At present, we not only limit the overall number of stations one entity 
can own, but we also flag mergers that will result in one or two entities 
dominating a market, thereby initiating a public interest review by the 
Commission. The majority would have the Commission rely only on a station 
limit, without any examination of the audience or advertising share.  Without 
such limits, one company could acquire all of the top stations in the market, 
with the result being that one entity dominates, or even monopolizes, that 
market.

C.      The Majority Arbitrarily Fails To Account for Local Market
Conditions in its Bright-Line Rules Undermining Localism, Diversity
and Competition.

The record demonstrates that every local newspaper market is “highly 
concentrated” according to the Department of Justice’s Hirfindahl-Hirschman 
Index.  Indeed, most communities have become one newspaper towns. The vast 
majority of local television and radio markets are tight oligopolies, with even 
higher levels of concentration for local news.  I do not find that the majority 
accounts for this extreme level of concentration in its decision, ignoring 
quantifiable data in the process.

A rulemaking that met our statutory obligation to safeguard localism, diversity 
and competition would have examined the voices available in specific local 
markets and whether proposed transactions would undermine these principles in 
specific communities.  The majority’s reliance on national bright line rules 
does not allow us adequately to take into account different situations in local 
markets.  The majority inconsistently allows parties to seek waivers of our 
rules where local conditions mean a transaction that violates the bright line 
rules would in fact not offend localism, diversity and competition; but it does 
not similarly accept petitions to deny transactions that undermine these core 
principles even if they meet our bright line rules. This one way ratchet is 
arbitrary and irrational.

D.      The Majority Arbitrarily Concludes that All Consolidation Will
Enhance News and Informational Programming.

The majority arbitrarily concludes as a general nationwide matter that 
efficiencies created through consolidation will enhance news and informational 
programming.  They therefore, a priori, determine that all mergers that cause 
concentration levels up to our bright line rules will serve the public 
interest, without any individualized examination of the facts of a particular 
merger.  There is no record to support such a sweeping conclusion.  The 
majority, without such support, bases its rules on the hope that companies will 
use some of the money they save through consolidation to invest in more news 
and informational programming.  But the record shows that instances where 
companies have provided more news and informational programming following 
consolidation are overwhelmed by instances where news voices and news 
programming in a market were eliminated.

E.      The Majority Arbitrarily Treats Television Stations, Newspapers,
Radio Stations and Internet Sites Equally For Purposes of Analyzing
Diversity and Competition in the Local Market.

The majority treats broadcasters as just one voice among many, no different 
from a website.  The majority’s analysis depends upon treating different types 
of media as equally important “voices” in the local market.  Clearly, different 
types of media are not identical in providing localism, competition and 
diversity.  This analysis ignores that broadcasters play a distinct role in our 
media.  They are granted the right to use a public resource and, in exchange, 
they commit to serve their local communities.  Notwithstanding the majority’s 
assertions about new technologies and the availability of alternative sources 
of information, the fact remains that there is still an inadequate number of 
frequencies to accommodate all those who wish to broadcast to local communities.

We should recognize and reaffirm the proud heritage of local broadcasters, many 
of whom are strongly committed to serving the public interest.  Unfortunately, 
consolidation has meant that broadcasters are less and less captains of their 
own fate and more and more captives to Wall Street and Madison Avenue 
expectations.  One large station owner reportedly stated that, “We're not in 
the business of providing news and information. We're not in the business of 
providing well-researched music. We're simply in the business of selling our 
customers products."  Another large station group’s “local” news is actually 
“distance cast” from one central location hundreds of miles away.  During the 
hearings and forums that Commissioner Adelstein and I attended, we heard time 
and again from small, local broadcasters that consolidation has had a direct 
and detrimental impact on their ability to compete against the large 
conglomerates that cut costs by consolidating operations outside of the 
community.  Although there are few such poignant examples, it is not only such 
places as Minot, North Dakota that are feeling the effects.

F.      The Majority Arbitrarily Subordinates Diversity and Localism
Concerns To Competitive Concerns.

The majority subordinates the statutory goals of localism and diversity to 
competition throughout its analysis.  The principles of localism and diversity 
are deeply rooted in our history.  Since the earliest days of our nation, 
access to a diversity of viewpoints on issues of public importance has been 
considered essential to democracy.  Maximizing the number of independent owners 
increases the likelihood of a wider range of viewpoints.  And Congress mandated 
that we protect localism because local media tailor their programming to the 
needs of their communities.

Yet, the majority time and again relies only on measures of economic efficiency 
to justify rule changes, but does so at the expense of viewpoint and ownership 
diversity.  It is clear that it would be less expensive to have one owner 
control all of the news outlets and to have the local broadcaster merely act as 
a passive feed for a national network.  But the American broadcast system is 
based on more than just market forces.  Any rule changes must be evaluated in 
diversity and localism terms, and not just economic terms.

I am pleased that the majority at least acknowledges the important goal of 
having adequate minority and female ownership in the broadcast industry.  But I 
am disappointed that it then fails to take well-considered action to try to 
achieve this goal.  Minority ownership is vitally germane to this proceeding.  
I fail to see how we can perpetuate diversity of viewpoint, for example, 
without addressing minority ownership.  Ownership matters to diversity.  The 
issue of its impact on women and minorities should not be relegated to a 
Further Notice at some indeterminate time.  It is not enough to allow dominant 
clusters that exceed our limits to be transferred to small businesses and then, 
after a few years, be transferred to a large media conglomerate.  How does it 
benefit minorities and women to maintain such high levels of concentration in a 
market?  How will minority- and female-owned businesses break into a market if 
the stations are already locked up?  Wouldn’t these businesses be better served 
if there were more opportunities for ownership and we addressed such problems 
as access to capital?

Other facets of diversity fare even less well.  The majority concludes that 
market forces will ensure adequate program diversity, and it dismisses outlet 
diversity and source diversity as independent goals.  There is inadequate 
record support for these sweeping decisions.  Lacking record support, the 
majority merely offers us and unproven beliefs for comfort.

In the end, this decision also disserves competition.  In a media world already 
well down the road toward high levels of consolidation, questions of preserving 
small, independent voices and of encouraging conditions conducive to new market 
entry should be a top Commission priority.  Instead, I hear around the country, 
and I read in newspapers almost every day, the anguish of independent stations 
facing the prospect of imminent absorption by one of the media Goliaths.  Some 
of these independents serve very diverse audiences and what they fear most is 
that the first casualty of a buy-out would be their very diversity.

IV.     The Order Fails To Consider Several Relevant Concerns and To Include 
Several Important Proposals.

The previous section describes a number of problems with the contents of the 
Order.  But equally troubling are the Order’s omissions.  The Commission has 
not conducted adequate analysis to make an informed decision on the impact of 
the additional consolidation we allow today.  The studies the Commission 
conducted are a start.  But, even putting aside the myriad criticisms of the 
conclusions and methodology employed in these studies, the Commission only 
examined a few questions.  Amazingly, we did not even attempt to consider the 
prospective impact of the consolidation that would occur following these rule 
changes.  Nor have we ascertained how these rule changes interact and work in 
concert, instead apparently assuming that each rule is an island, and that the 
interactivity of rule changes will not have important effects on the media 
landscape.  These studies also do not consider what the impact of these rule 
changes will be on local communities across this country.

This section details several relevant specific concerns that are not adequately 
addressed in the Order, and several important proposals that, if included in 
the Order, would have greatly improved it.

A.      The Order Should Address the Impact of Undermining Concentration
Protections on Independent Programmers.

Commenters addressed the need to require more independent programming on our 
airwaves so that a few conglomerates do not act anti-competitively to control 
all of the creative entertainment that we see.  These proposals should have 
received the serious attention they deserve in this decision.  Over the past 
decade, we have witnessed a substantial increase in the amount of programming 
owned by the networks.  Where once independent production accounted for much of 
what we saw, we now have huge vertically-integrated conglomerates that own the 
vast majority of the programming they deliver.

As we loosen the concentration limits, we should have addressed whether there 
is a need for independent programming requirements to ensure that we do not end 
up with national vertically-integrated conglomerates that control the 
distribution channels and all of the content we see and hear.  The powers of 
vertical concentration in today’s broadcast industry are part and parcel of the 
power that accompanies ownership.  Network ownership of the full range of prime 
time programming constrains competition, consigns independent production to 
oblivion or, at best, minor and marginal roles, and it cripples the production 
of diverse programming.  It also entails serious job losses for thousands of 
workers, including creative artists, technicians and many, many others.  I am 
disappointed that the majority dismisses out of hand the issues raised by 
independent content producers.  The majority expresses doubt that it had notice 
to act and then finds that changes to our rules are not warranted in any event.

B.      The Order Should Establish a Legitimate License Renewal Process To
Partially Protect Against the Risks of Further Consolidation.

Some commenters suggested the need for an effective license renewal process 
under which the Commission would once again actually consider the manner in 
which a station has served the public interest when it comes time to renew its 
license.  The Commission formerly did exactly that.  But the system has 
degenerated into one of basically post-card license renewal.  Unless there is a 
major complaint pending against a station, its license is almost automatically 
renewed.  A real, honest-to-goodness license renewal process, predicated on 
advancing the public interest, might do more for broadcasting than all these 
our other rules put together.  Such a process, properly designed, would avoid 
micro-management on a day-to-day basis in favor of a comprehensive look at how 
a station has discharged its public responsibilities over the term of its 
license.  Such an approach is most certainly within the scope of this 
proceeding, if for no other reason than the objective of our ownership rules is 
to benefit the public interest.  It would certainly be a welcome supplement to 
achieving the goals Congress established for the ownership caps.

C.      The Order Should Require Licensees and Those Seeking License
Transfers To Periodically Report To the Public How They Serve the
Public Interest.

From the earliest days of broadcasting, the Commission has sought to promote 
localism and obligated licensees to serve the needs and interests of the local 
communities.   Why not require licensees to disclose more publicly how they are 
serving the public interest and the needs of their local communities?  Such 
information, perhaps made available on the Internet, would give the public an 
overview of how its airwaves are being used and might provide incentives to 
produce more and better local news and community programming.  At a minimum, it 
would allow us to analyze whether our rules are actually achieving their 
desired goals so that future Commissions can make better decisions.

In addition, as discussed above, special disclosure rules ought to apply to 
buyers and sellers seeking to transfer a license.  They ought to specify the 
tangible, concrete ways in which the transaction would serve the public 
interest.  The merged entity would then have to disclose after the transaction 
how it fulfilled its public interest benefits.  Such a step would allow the 
Commission to identify those transactions that serve the public interest, 
convenience, and necessity, as required by the statute.  The majority claims 
that consolidation could lead Big Media to produce more and better local news 
and community programming.  Let’s take some action to make sure this 
expectation is met and to hold conglomerates accountable after mergers.  
Moreover, this procedure would allow us to identify those transactions in all 
markets -- including smaller markets -- that serve the public interest.

D.      The Order Fails To Analyze the Impact of Undermining
Concentration Protections On Children, On Families, and on
Indecent Programming.

In our hearings, we heard from parents fed up with the rising tide of indecency 
and violence on the airwaves and repulsed by programming’s race to the bottom.  
We also heard from broadcasters who had managed network-owned and operated 
stations and were unable to preempt programming that they believed was not 
suitable for their community.  These broadcasters told us that programming 
decisions were often made by distant network executives rather than by local 
station managers.  In contrast, we heard from independent local broadcasters 
who had stood up to programming they and their communities found inappropriate.

Some have suggested that there may be a link between increasing consolidation 
and increasing indecency on our airwaves.  Yet, the Commission failed to 
address this issue in its analysis.  Has consolidation led to an increase in 
the amount of indecent programming?  When programming decisions are made on 
Wall Street or Madison Avenue, rather than closer to the community, do 
indecency and excessive violence grow more pervasive?  I do not know the answer 
to this question.  I do know this: we have no business voting until we take a 
serious look at the matter and amass at least a credible body of evidence. We 
owe it to our children, and their parents, to explore this question before 
voting on whether to allow more consolidation.

I say again: ownership matters.  If it is not germane for this proceeding to 
ascertain whether there is a possible relationship between indecent content and 
the fact that a shrinking Media Elite controls that content, then I do not know 
what is germane.

In addition to its failure to consider the impact of consolidation on 
indecency, the majority does not look at the relationship between concentration 
and positive children’s programming.  We now have some data on this subject in 
the record.  The news unfortunately is not good.  A recent study analyzed the 
market in Los Angeles and found that the number of broadcast TV programs for 
children dropped sharply after independent local stations were swallowed up in 
media mergers.  This study found a 47 percent drop in children's programming 
with duopolies accounting for the largest decreases.  Another recent survey 
found that 80 percent of parents think the FCC is doing a poor to fair job of 
protecting families and children.  Unfortunately, we do not take actions today 
to gain their confidence.  Although the Commission does take a positive step 
today to ensure that duopolies and triopolies will not merely rebroadcast the 
same children’s programming, we do nothing to examine how Big Media will serve 
our youngest viewers and listeners before allowing further consolidation to 
take place.

Some believe that the First Amendment does not allow us to consider these 
subjects in relation to our concentration rules.  But there are laws in force 
today on both of these subjects and courts have upheld special responsibilities 
for broadcasters related to these goals.  If there is a question of whether the 
Commission can constitutionally try to use concentration restrictions to reduce 
indecency and increase children’s programming, let us have that debate on the 
record rather than ignore these clear Congressional goals.

E.      The Order Fails To Analyze the Impact of Undermining
Concentration Protections on Women and Minority Groups.

Twenty-five years ago, in the FCC’s Statement of Policy on Minority Ownership 
of Broadcast Facilities, the Commission said, “It is apparent that there is a 
dearth of minority ownership in the broadcast industry.”  A quarter of a 
century later, there still is.  Although today’s Order recognizes the 
importance of minority and female participation, we fail to conduct rigorous 
analysis of the impact of today’s rules on minorities and women.

We know that there are substantially fewer radio station owners today than 
there were before the rules were changed in 1996.  People of color now make up 
less than four percent of radio and television owners.  The National 
Association of Black Owned Broadcasters tells us that the number of minority 
owners of broadcast facilities has dropped by 14 percent since 1997.  People of 
color are under-represented not only in boardrooms, but in newsrooms as well.  
Maybe that’s why a study from Fairness and Accuracy in Reporting found that 92 
percent of sources interviewed on the nightly network news were white and 85 
percent were male.  A handful of huge companies stand astride the media world 
and it is not helping diversity of viewpoint, diversity of ownership, or just 
plain old American diversity.

It is not surprising therefore that among those opposing the relaxation of 
ownership rules are the Congressional Black Caucus, the Congressional Hispanic 
Caucus, the Congressional Asian Pacific American Caucus, the Leadership 
Conference on Civil Rights, the National Organization for Women, the National 
Association of Black-Owned Broadcasters, the National Association of Hispanic 
Journalists, the National Association of Black Journalists, and many others who 
are afraid that additional media concentration wlll reduce opportunities for 
minorities and women.

We have not even attempted to understand what further consolidation means in 
terms of providing Hispanic Americans and African Americans and Asian-Pacific 
Americans and Native Americans and women and other groups the kinds of programs 
and access and viewpoint diversity and career opportunities and even 
advertising information about products and services that they need.  America’s 
strength is, after all, its diversity.  America will succeed in the 
Twenty-first century not in spite of our diversity, but because of our 
diversity.  Diversity is not a problem to be overcome.  It is our greatest 
strength.  And our media need to reflect this diversity and to nourish it.  It 
takes no rocket scientist to understand that changing the rules of media 
consolidation is likely to have far-reaching effects on different groups.

The decision today states that we will address minority and female ownership 
proposals in the future once we have established a new Advisory Committee on 
Diversity.  An advisory committee is a good step, but we should not be 
deflected from tackling the ownership diversity questions that are central to 
the media concentration item before us now.  I am reminded of that old 
bureaucratic sleight-of-hand of foisting controversial issues onto a new 
government commission or task force to get them out of the way.  In any event, 
solutions to this problem will be harder to come by if media conglomerates 
proceed now to lock up control of the scarce licenses to use the public’s 
airwaves.  That is why these problems need solutions now, not somewhere far 
down future’s road.

Where the Commission has acted in this decision, it is not to the benefit of 
minority communities.  The majority even determines that those who speak 
Spanish or any language other than English do not deserve the limited 
protections the Commission adopts today.  The cross-ownership rules apply only 
to English-language newspapers unless it can be demonstrated that another 
language is dominant in that market.  Thus, these safeguards are not even 
triggered by a merger between a broadcaster and, for example, a 
Spanish-language newspaper in most communities in this country.  This decision 
allows even higher levels of media concentration for the millions of Americans 
who depend on non-English media for their news and entertainment.

F.      The Order Fails to Analyze the Impact of Consolidation
on Small, Local Broadcasters.

Increasing consolidation threatens the very survival of small, local 
broadcasters.  Media analysts expect that the only option for local 
broadcasters will now be to sell.  They conclude that those that want to remain 
will face an extremely tough road.  During our hearings, we heard from small 
broadcasters that had already been squeezed out of the market.  These rule 
changes can only accelerate this trend.  These changes could spell the end for 
such uniquely local stations as WCIU TV in Chicago and many other small, 
independent broadcasters.  Yet, we have failed even to consider the impact on 
these local broadcasters.

G.      The Order Fails To Analyze the Impact of Undermining
Concentration Protections On Small Businesses and
Advertisers.

Changes to media concentration rules also threaten small businesses.  As fewer 
and fewer companies control our media outlets, small local broadcasters will 
find it harder and harder to compete.  Other small businesses will find it 
harder to produce and sell programming as national vertically integrated 
conglomerates control local distribution.

Concern has been expressed in the hearings that Commissioner Adelstein and I 
conducted that consolidated media markets are more expensive for advertisers.  
We have also heard concerns relative to consolidated media companies forcing 
advertisers to run ads in all their media assets and stations, not just the 
ones the advertisers really want.  This means that even if per-eyeball ad rates 
look stable in a market, real-life advertising expenses may be rising 
significantly.  And small businesses may not be able to afford advertising on 
multiple outlets, even if the rates in one particular market are not rising.  
This is another of those circumstances that need study before we proceed to 
vote.

Moreover, we have heard that consolidation may lead to homogenization and media 
geared to certain and limited demographics.  Already, we have seen a reduction 
in children’s programming due to consolidation.  This means that advertisers 
who want to reach minority groups or niche communities may be stuck without a 
way to access them.

Small businesses have been, and will continue to be, the engine of growth in 
our country.  Yet we fail here to analyze how media consolidation will affect 
small businesses.  The Office of Advocacy of the Small Business Administration 
strongly urged the Commission to conduct such an analysis prior to rushing 
ahead with a decision.

V.      Conclusion.

I began this proceeding hopeful that we would take a balanced, measured 
approach, engage in fact-finding and open discussion, and reach out to 
stakeholders across this land.  Instead, in the face of (1) a record that 
simply does not support the changes being proposed, (2) a record that fails to 
do justice to the larger implications of these issues, (3) overwhelming public 
opposition, (4) widespread and bipartisan concern about both the substance and 
the process that have been followed here and (5) the potential for great and 
irreversible consolidation before we fully understand the consequences of our 
actions, I am convinced this is the wrong decision.  It is wrong for the media 
industry, wrong for the public interest, and wrong for America.

All this means that I am deeply saddened by the Commission’s actions today.  
Some have characterized the fight against this seemingly pre-ordained decision 
as quixotic and destined to defeat.  But I think, instead, that we’ll look back 
at this 3-2 vote as a pyrrhic victory.

This Commission’s drive to loosen the rules and its reluctance to share its 
proposals with the people before we voted awoke a sleeping giant.  American 
citizens are standing up in never-before-seen numbers to reclaim their airwaves 
and to call on those who are entrusted to use them to serve the public 
interest.  In these times when many issues divide us, groups from right to 
left, Republicans and Democrats, concerned parents and creative artists, 
religious leaders, civil rights activists, and labor organizations have united 
to fight together on this issue.  Senators and Congressmen from both parties 
and from all parts of the Country have called on the Commission to reconsider.  
The media concentration debate will never be the same.  This Commission faces a 
far more informed and involved citizenry.  The obscurity of this issue that 
many have relied upon in the past, where only a few dozen inside-the-Beltway 
lobbyists understood this issue, is gone forever.

I believe, after traveling the length and breadth of this country, that our 
citizens want, deserve, and are demanding a renewed discussion of how their 
airwaves are being used and how to ensure they are serving the public interest. 
 I urge my colleagues to heed the call.  I want to thank the hundreds of 
thousands of people who have attended hearings, filed comments, written letters 
to the editor, and contacted the Commission.  You have made a difference.  And 
if you stay the course now, we have a chance to settle this issue of who will 
control our media and for what purposes, and to resolve it in favor of public 
airwaves of, by and for the people of this great country.

 Red Lion Broadcasting Co. v. FCC, 395 U.S. 367, 390 (1969).
 Learned Hand, Memorial Service for Justice Brandeis, December 21, 1942.
 Sinclair Broadcasting Group, Inc. v. FCC, 284 F.3d 148, 168-69 (D.C. Cir. 
2002); Fox Television Stations, Inc. v. FCC, 280 F.3d 1027, 1041-45 (2002), 
rehearing granted, 293 F.3d 537 (D.C. Cir. 2002).
 Sinclair, 284 F.3d at 162.
 Fox, 280 F.3d at 1042-43.
 Jonathan Levy, Marcelino Ford-Livene and Anne Levine, Broadcast Television: 
Survivor in a Sea of Competition, Federal Communications Commission, Office of 
Plans and Policy Working Paper 37, 309 (Sept. 2002).
 See, e.g., Review of the Prime Time Access Rules, 60 Fed. Reg. 44773 n.101 
(1995).
 Horizontal Merger Guidelines, 57 Fed Reg. 41552 (1992).