The Education of Nancy Pelosi

In 2009, the "media monopoly" is more desperate than powerful

Michael Copps, the acting head of the Federal Communications Commission (FCC) and one of Washington's most enthusiastic regulators, may have decided that the press needs a little consolidation after all. For years, Copps has defended the FCC's strict restrictions on when a company can own a newspaper and a broadcast outlet in the same market. But last week he told the Bloomberg news service that the current rules do not meet "the needs of the industry, the economy, or the public," and that the agency should "visit this whole problem" soon.

It was unclear what precisely Copps would like to change. It's possible the commissioner was not criticizing the restriction itself, but a mild loosening in the restriction passed last November. And even if he has reversed himself, who can tell what other changes would be part of the package? For all we know, Copps is preparing a proposal to regulate those consolidated local media as a public utility.

But if he did change his mind, Copps isn't alone. Six years ago, when George W. Bush's FCC proposed some regulatory revisions that would make media mergers easier, Rep. Nancy Pelosi (D-Calif.) was among the politicians who lined up against the new rules. More recently, though, she sent Attorney General Eric Holder a letter asking him to allow newspapers more freedom to consolidate when the alternative is insolvency. "The result," she wrote, "will be to allow free market forces to preserve as many news sources, as many viewpoints, and as many jobs as possible."

The argument isn't new, though it wasn't on the lips of Copps or Pelosi in 2003. It sounded jarring then, when Big Media still looked like a swelling juggernaut, to suggest that some of those companies might need to combine just to survive. But the position proved prescient, and now some (though not all) of the idea's old opponents are coming around. If you're scared a single company will dominate both your city's airwaves and its newspaper market, it ought to be even scarier to imagine a city where one company dominates the airwaves and there's no newspaper market at all. Better to give the local mediamakers more flexibility, the argument goes, so that they might find new arrangements that allow them to stay in the black.

My view: I'm not sure it will work. Newspapers should certainly have the right to attempt such experiments, just as they should be able to experiment with nonprofit status, online-only operations, and other ideas currently circulating. The potential benefits are real, and the potential harm has obviously been oversold. But that doesn't mean any particular experiment will succeed. The trouble with many of our alleged media monopolies is that they think like monopolists even when competition is breathing down the backs of their shirts. I'm sure there are ways to combine print and TV resources into something exciting and innovative, but these aren't necessarily the institutions that will discover those approaches. It's at least as likely that joint ownership will do little more than add a couple years to a paper's life, with a dwindling staff of frustrated reporters corralled into silly cross-promotion schemes as they quietly send their résumés to every PR firm and J-school in the state. Newspapers are facing the death of a business model. They can't count on another business to rescue them, especially a business that faces revenue problems of its own.

There is a deeper lesson here for media activists of all stripes. When Michael Copps attacked consolidation, he was rewarded with attaboys from across the political spectrum. I have friends who ought to despise Copps' politics—the commissioner is, to put it mildly, no friend to the First Amendment—but who embraced him as an ally because he was denouncing the same conglomerates they hate. We were heading, they worried, toward a Space Merchants world where corporate titans feed whatever they please to a nation of passive consumers. And so they cheered Copps on.

But with each year, Big Media look more and more like a paper tiger. The argument over ownership resembles the reaction a decade ago to AOL's merger with Time Warner, a deal that provoked furious debate when it was announced in 2000. Opponents fretted that giant media companies would hold even more power over audiences; defenders argued that consolidation could mean more investments in quality journalism. A smaller, more prescient group suggested that the combination was unsustainable and destined to disintegrate. As my former editor Virginia Postrel wrote in 2001, "There's no particular reason for all these businesses to be under one roof, rather than contracting with each other in the marketplace. The merger is just the first stage of restructuring. Look for lots of spinoffs over the next few years." Sure enough, Time Warner has spent the past half-decade selling off properties at a rapid pace.

So much for the Space Merchants vision. In 2009 those corporate titans are desperate and uncertain, and media consumers are more active than ever before. (We live in a world where people can organize against Facebook's corporate decisions using Facebook itself.) That doesn't mean—oh Lord, how it doesn't mean—that we've entered a media utopia. It does mean we occupy a landscape radically different from the country we lived in as recently as the 1990s, and that anyone serious about building alternatives to the centralized and hierarchical old media has to take those changes into account. Allowing ailing newspapers to merge with broadcasters might not save those papers' lives. But it won't give them any more power over us either.

Jesse Walker is the managing editor of Reason magazine and the author of Rebels on the Air: An Alternative History of Radio in America. 

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  • Cabeza De Vaca||

    Is that a picture of the Kochoctopus at work?

  • Anonymous||

    The article can be adequately summed in this quote:

    I'm sure there are ways to combine print and TV resources into something exciting and innovative, but these aren't necessarily the institutions that will discover those approaches.



    When there are no barriers to entry and exit, those "institutions" don't have to be the ones to innovate. However, some people only understand economics in zero-sum terms, where the other party is an institution of authority, and thus has (government-demanded) privileges and responsibilities that go beyond their social and economic importance. And so it goes.

  • ||

    When I was growing up, and into the years of young adulthood, the government was busy telling newspapers and broadcast outlets to break up. Now it's all the rage to merge them together again.

    Has it occurred to anybody that, had we left newspapers, tv stations, and radio stations together in the first place, the combined entities would have embraced multi-media convergence sooner, and been in a better position to exploit the internet as a new distribution medium for the rich content they would have had?

    Of course, recent mergers and consolidations have largely achieved the same result, but not without a lot of gnashing of teeth, and a lot of reshuffling of the industry's deck of cards. It seems to me that the net product of all of this government intervention was that reshuffling. Did we benefit from it? I'm sincerely asking, as I think I might be persuaded to come down on either side of the question.

  • Hmm||

    The move towards larger control of the airwaves began a while ago. Sell has been putting differently owned stations under one roof for a while. He does it with a capital company that is owned by a former employee. It has already occured in Denver and St.Louis. With the Internet the effect of mergers will be minimal until the liberals are out of power. Then it will be the end of the world.



    iPhone posting on the train takes pure talent.

  • hmm||

    Sell = Sam Zell

  • Citizen Nothing||

    I think my newspaper has benefited from local ownership and from the other media properties owned by the same family.

    I suspect that the paper subsidized our statewide cable news network when it started a decade ago, and that the local broadcast network TV affiliate that the company owns (grandfathered in) helps keep everything afloat these days.
    We've also got a couple of popular local radio stations and recently bought a weekly entertainment newspaper.
    Yeah, we're losing jobs at the daily, but I think we've held on longer that we would have without the, shudder, synergies.

  • LarryA||

    I'm sure there are ways to combine print and TV resources into something exciting and innovative,

    Exciting and innovative are nice, but wouldn't it be great if they could be informative again?

  • engineer||

    Abolish the FCC. Sell off the property rights to the spectrum, and use the proceeds to put a pinprick in the national debt.

    That is all.

  • Scarpe Nike||

    is good

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