Curbing concentrations of media ownership

Last Monday the Federal Communications Commission of the United States of America held its biennial regulatory review open meeting.

It reviewed the Commission's Broadcast Ownership Rules of the Telecommunications Act of 1996, and voted to change the US media ownership rules, raising the television ownership ceiling and permitting television-newspage cross-ownership.

In short the Commission considered a report concerning its broadcast multiple ownership rules which could practically change the media landscape in the immediate future.

Control of the media affects the vibrancy of political and civic discourse. The debate on the deregulation of media ownership concentration which preceded this meeting reflects the diverse opinions the state, the industry and the public have on such an issue.

In this case while the state seems intent on eliminating restrictions on media ownership, thus promoting the "uninhibited marketplace of ideas", journalists and broadcasters are citing the relaxation of similar rules for radio shows, in 1966, as having prompted conglomerates to centralise broadcasting from remote headquarters and to pump homogenised play lists to stations across the country.

When merging and acquiring media outlets nationwide a new company may achieve economies of scale and greater profitability, but on the other hand may change the broadcast system into becoming much more about the network's bottom line and offer much less access to diverse viewpoints which impede the functioning of democracy.

The case of Clear Channel Communications is often cited by opponents of deregulation in the States as an example of adverse effects of concentration.

In the space of six years the network expanded from 40 radio stations to 1,200, cutting jobs down to 200 nationwide. "There's no way a radio station can be actively and locally run by one-tenth of a human being", Ben Bagdikian, former dean of the School of Journalism at University of California at Berkeley, recently declared. During the same period the number of radio owners in the US declined by 34 per cent.

This media-industry deregulation debate clearly presents the case for an analytical discussion on media ownership regulation.

Monopolised marketplaces do seem to threaten journalistic quality and media pluralism, drive up costs for advertisers and shut out voices that disagree with corporate interests. Conversely, it can be said that they seem to improve broadcast news coverage, by allowing newspapers to own TV and radio outlets.

The whole argument behind regulating concentration of media ownership, however, clearly focuses on whether rules are necessary to prevent individual companies from gaining too much control over what we see, hear, and read. In the current debate I tend to agree with those who believe that media mergers should only be allowed in the public interest.

Public interest

Defining public interest is very specific. The Council of Europe has, in 1999, recommended its member states to create "media authorities invested with powers to act against mergers or other concentration operations that threaten media pluralism or invest existing regulatory bodies for the broadcasting sector with such powers".

With a long history of public service broadcasting, European consumers perceive their European governments as legitimate regulators in the media, especially where it concerns television's "uniquely pervasive presence".

Inevitably such tradition poses the danger of intrusive government control. While the current level of newspaper concentration does not seem to be sufficiently troublesome to justify government intervention, television, again because of its special impact, is seen as justifying legislative action that is not permissible in the newspaper context.

This seems to call for legislative structures with varying concentration rules that range from the indispensable, in order to ensure pluralism in television, to a total withdrawal in favour of the market, as found in electronic systems where ordinary people and groups can have access to produce programming free from operator control over the system.

A mixed media system might stand the best chance of ensuring the free flow of information from as many divergent sources as possible, thus inviting "the public interest" to "define the public interest" (Fowler & Brenner: 1982:60).

Traditionally, ownership regulations promoted diversification of ownership in order to maximise diversification of programme and service viewpoints. When the media themselves became powerful "big business", ownership regulations rescinded.

The media seem to be on a trajectory impelled by trade and commercial exploitation. Since ownership limits do not always seem necessary to allow diversity of expression in the media, a new conflict is emerging fielding regulators and private interests vying for control.

The consumer may now be stuck between two evils: either have regulatory sanctions from government authorities, risking the loss of multiple and cross-ownership opportunities; or suffer "repression" of the freedom of the press and greater standardisation of output by private interests.

Against a globalisation backdrop, however, I believe that curbing certain concentrations through some form of regulation remains the lesser evil.

The diverse possibilities introduced by the media concern education on alternatives, mediation between people and the creation of ideas towards the attainment of freedom.

Such good barometers of the health and depth of political democracy cannot, and should not be, left to chance in the hands of a few global giants of commerce.

The media today have moved in to occupy the vacuum left by the dissolution of extended families and close-knit communities. Governments are justified in retaining some form of legislation that checks expanding conglomerates from excessive commercialisation to reach audience and readership levels that appeal to advertisers or narrow the diversity of political opinions available to the public via the media. Relinquishing obligations to legislate will accommodate the interests of a commercial elite, thus "subverting democracy" (Doyle, 2002:178).

When media law is in place it also serves as a key policy instrument that monitors profit creation and financial transparency. It may also financially enable public content providers, usually through the collection of licence income, to produce indigenous cultural products of quality, and carry them, as a "must" on cable, satellite and digital networks.

Safeguarding democracy

The media industry is made up of different layers of creative forces and services. Concentration of ownership in the media weakens fair access to gateways and filters. While the rights of authorship and creativity may be safeguarded.

What could be at stake in a rapid economic global expansion are the rights of consumers when it comes to protecting and sustaining their communities' cultural heritage.

As the industry becomes highly centralised and controlled by a few interlinked corporations social, cultural and human rights lose de facto protection and find themselves at the mercy of private global markets, which may not be ready to put such rights on their priority list for lack of commercial value.

Antitrust and regulatory policies have, over the years, addressed dangers of ownership concentration with reasonable success. Government policy has been generally derived from the juxtaposition of such laws and practice with free speech jurisprudence.

The social system functioned better when space was made for people to dissent publicly and the marketplace of ideas saw to that. Until one day private power patterns in the media market itself had to be monitored and checked.

Concentrated, this power undermined the same free marketplace of ideas it once sustained. The most practical option left open to governments in this sensitive landscape is perhaps to enhance the marketplace, that is change concentration ownership policies and instead of securing specific options in media content, alter the structure so that different kinds of owners have the opportunity to offer different content.

The European media market

Although the European media market does not reflect a unified or cross-integrated system of provision for a collective audience but a notional aggregation of the markets of each individual member state, the European community has a long tradition of media ownership policy via various conventions, laws and directives of the Council of Europe and the European Union.

The Council of Europe's Committee of Experts on Media Concentrations and Pluralism 1997 report on media ownership in Europe suggests a prevalent tendency towards high and increasing levels of media and cross-media concentration.

Furthermore, the Committee of Ministers, when meeting on Measures to Promote Media Pluralism in 1999, recommended that member states not award additional broadcasting licences to companies which have reached the permissible thresholds in a relevant market.

The European Commission of the EU, on the other hand, has repeatedly put the pan-European policy on its agenda and taken action to harmonise national restriction on ownership.

One of its most important objectives in this regard has been to legitimise its policy of ownership and therefore of plurality by tackling economic problems that impede cross-border investment in the European media.

In 1996 the DG15 presented its first draft of a possible EU Directive on media pluralism that created numeric limits, most notably the 30 per cent upper limit on monomedia ownership for radio and television broadcasters and an upper limit for total media ownership of TV, radio and /or newspapers of 10 per cent of the market in which it operates.

This seemed quite reasonable but was not met with cross-border approval in Europe. According to the corporate affairs director of one of the UK's largest media firms, the proposed draft tried to tidy up the rules to increase cross-border sales and prevent one person from owning too much, in one single document. It also did not differentiate between small and large markets.

A year later, while negotiating its position after objections, the Commission proposed greater discretionary powers to member states in setting their own upper limits, unwittingly rendering less effective any new directive.

In 1997 the Directive was changed from Concentrations and Pluralism to Media Ownership in the Internal Market, focusing more towards removing obstacles to the internal market rather than compromise its questionable competence in pluralism.

Although member states of the EU adopt and ratify most articles of the law as laid down by the European Parliament, there is in practice limited effect when it comes to concentration regulation as recommended by both the Council of Europe and the Commission.

In fact some media firms still regard the current patchwork of media ownership rules across Europe as an impediment to investment with little or no instigation to change.

However, the Commission fares better when controlling media concentration through the DG4's 1989 Merger Control Regulation. The DG4, sharing Commissioner Mario Monti's chairmanship in different periods, has used its powers to review, and sometimes block, proposed mergers and joint ventures.

As examples these included blocking Time Warner's acquisition of EMI in the UK in 2000, while allowing Rupert Murdoch's News Corp to go ahead in merging two Italian pay-TV cable operators to form Sky Italia in April this year, with stringent conditions attached.

The European Parliament however rightly believes that this is a case of the single market being put into practice at the expense of pluralism. So much so that as recently as last November, Parliament called on the Commission and Member States to safeguard media pluralism, and given the danger of increased media concentration, called on the Commission to draw up an updated Green Paper by the end of 2003 on media pluralism.

Plurality and market efficiency

Nonetheless competition laws are not always particularly effective at national level in some European countries, while DG4 has no competence over many media mergers and alliances when they fall below the revenue thresholds set out in the 1989 Regulation.

Concentration curbs are not sufficiently served by economic measures. The need to regulate pluralism in the media on democratic, social and cultural grounds requires a separate and distinct policy objective from ensuring market efficiency through competition.

Ensuing from this point of view the future of any effective European concentration regulation may lie in a new 'tiered' type of structure that could be designed to curb excessive concentrations through a non-uniform set of rules that meets the required levels of diversity of ownership for markets of different sizes.

Such an approach would remove uncertainty due to different national limit regulation; would take into account the divergences in the resources available in markets of different sizes; and might help transcend the problem of national suppliers influence over domestic political mechanisms that are curbing their growth.

Concentration of media ownership regulation could safeguard democracy by protecting it against unhealthy alignments of corporate media power and political power.

But as has been seen in this review, this could prove a hard nut to crack. The European community itself, made up of politicians and public servants, while continually striving to formulate a public policy in pursuit of objectives that serve the public interest, unfortunately, and quite often, also accommodates other interests, including those of a lobbying and powerful elite - the corporate media.