How Federal Communications Commission Regulates Media Ownership - Research Paper Example

?Media Ownership Reform Section I: What Legal ity does FCC have to Regulate Media Ownership? The Federal Communications Commission (FCC) was created back in 1934 in the Communications Act of the same year. This commission was created to run as an independent agency of the government with the responsibility of regulating foreign commerce and interstate communications through radio, wire, satellite and cable. The main idea behind the creation of the agency was to ensure that wire and radio communication was available as much as possible to all citizens. The commission had the responsibility of ensuring that the limited airwaves of broadcast that are owned by the United States public are used to the interest of the public1. During early 1940s, different larger media companies began to gain much power and influence than others driving the fear of monopoly in the industry. The federal government instituted a series of reforms in the industry to curb the trend and ensure that the field remained competitive and diverse as much as possible. The reforms worked to check the growing trend of monopoly that was evident in the industry. To check this, the government created rules to ensure that there was competition in the industry as well as ensure the control of monopoly. Many regulations were proposed and later on passed into laws to check the ownership of media houses. Most of the regulations instituted aimed to ensure that no media house had greater control of a certain market by ensuring that they had access to a certain percentage of the market. Further, the rules provided that the media houses owned and controlled a predefined number of communication and broadcast stations2. All these regulations were on the constitutional basis of ensuring that the American citizen had the desired kind of access to information as much as possible. The mandate of FCC to regulate the industry was granted by the congress to check on the influence of big media houses. Allowing a small group to take control of the media would mean that only few people will have control of what is broadcasted to the public and this can be harmful to media democracy and the right of citizens to have access to information. The commission was granted a regulatory jurisdiction to oversee the communications industry in all states in the United States. Since its creation, the agency has the responsibility of reporting to the congress directly. Under ownership, the FCC has the mandate to regulate the number of media outlets that are owned by a single media house. The main reason behind the creation of the FCC was to regulate interstate and foreign communications by wire and radio to ensure that all processes in the area were at the interests of the public. However, as the industry has evolved over time, the commission has been delegated the responsibility of regulating radio, television, and satellite communication, a responsibility that the commission shares with state agencies. To accomplish its mandate, the FCC was allowed the powers to control the assigning of broadcast spectrum and frequencies to various services, licensing providers in the industry and enforcing laws that relate to communications. The commission has the authority to regulate inappropriate and illegal material broadcast such as cigarette advertisements and other programs that relate to aspects of campaigning and child programming. This authority gives the commission more powers to regulate media ownership3. Section II: The Problems with the Current Media Ownership Rules The current media ownership rules provided by the regulatory agency have been under scrutiny on the provisions and capabilities to ensure efficient control of the industry. The industry has grown rapidly over time with changes in technology and there are questions as to whether the regulation of the industry is necessary and efficient in accommodating and promoting such changes. The FCC has proposed various amendments on its provisions to see the deregulation of the industry, something that has sparkled public concerns on the effect it will have on the democracy of the industry. To ascertain the kind of problems that exist in the current laws, the paper will analyze earlier laws created to check competition and the advent of monopoly and compare them to the needs of the current market. Regulation of ownership highly matters in that it will ensure that a certain number of individuals or media houses do not define the kind of information that people are allowed to access. When a station is allowed to have control of a certain market, the monopoly will allow them to dictate what to show to the public and not what to show. Further, issues such as corruption can emerge with individuals seeking to ensure that controversial information does not reach the public. This explains why the regulation of ownership was and remains to be critical in the industry. The threat that bigger media houses would take control of the market back in 1940s led to the passing of National Television Ownership Rules and the Local Radio Ownership rules into law. These laws barred any broadcaster from being in ownership of television stations that reached more than 35% of the United States homes. Five years later, another rule, Dual Television Network Rule, was also passed into law to bar any other influential network from purchasing another4. Another model that remains to be effective even in the current market place was passed into law in 1949. This was named the Fairness Doctrine and was established to limit the power that media corporations had in the control of communication systems of the country. This doctrine established that the media had the responsibility of serving the interest of the public in certain predefined ways. It stressed on the importance of ensuring that all proposals are considered on issues of communication to the public. The concern for a wide and diverse ownership in the industry continued during the 1960s and 1970s. In 1964, a law that prevented any single company in the industry of broadcast from owning multiple television stations within the same locality. Six years later, another law that prevented the big media houses from owning a radio and television in the same market was also passed5. A major overhaul of the communications law was seen in 1996 after the signing of the Communications Act of 1996 into law. The act was directed towards the restructuring of the industry to ensure that it merged the growth and new technologies in the industry. The provisions of the law largely aimed to deregulate the industry and allow competition and through easy entry. The main problem in the current regulatory regime lies in the deregulatory measures that were taken in the 1996 reforms. The FCC took the decision to limit its limitation on ownership to promote diversity in the industry as well as competition. The deregulation promoted the merging of media houses a decision that resulted in the creation of single entities in the industry, a situation that has resulted in consolidation. This has resulted in content providers in the media industry being concentrated in fewer entities. With this, fewer companies will eventually have control over the industry and this could even allow them to employ censorship to information that they will feel not appropriate for the citizens. With fewer companies and reporters as it is becoming evident in the current market as a result of merging, there will be less information conveyed to the public6. Another problem that is evident in the current ownership rules concerns the regulatory commission itself. The FCC seems to be controlled and regulated by the congress and the president. The commissioners are appointed by the president and approved by parliament. The president also appoints the chairman of the commission from the five approved commissioners7. Most of them are members of certain parties in the government and this has created some form of mistrust from the public. There is a concern that the body is actually regulated by the government and most of the reforms are motivated from inside. Section III: The Proposed Change in Media Ownership Rules The main objective of the creation of FCC was to ensure regulation and control of the industry given that companies that had already established in the market posed a threat of totally controlling the market. This could result in control of the information that was available to the public. To check this, the process of deregulation should be carried out keenly to check on the kind of effect it would have on the market and the right of information. In allowing mergers, the FCC should ensure to limit the number of mergers that a single entity could own. Over-excessive ownership such as what is seen by the merging of AOL/Time Warner should be limited to ensure that no single company merged to create a large company under control of one individual. The FCC should also create regulations to check on the purpose of merging to ensure that it is in the interest of the public rather than companies merging in their own interest such as minimizing the number of employees. In deregulating the industry, the FCC should also ensure to define the kind of companies are allowed to merge8. Already established players should not be allowed to merge as this will lead to control over a given industry. Big industries merging will also close out small developers in the industry from developing as it will be difficult to penetrate such markets and this will result in consolidation rather than the expected diversities. The FCC should check to deregulate the provisions in the ownership of satellite communication. Companies in the industry should be allowed to merge to ensure that competition in the technology is increased. The FCC has the mandate to employ any amendments to the ownership policy and this will allow them to facilitate such changes to its policies. Section 202(h) of the Communications Act allows the commission to propose reviews to its laws after a period of two years to facilitate regulatory reform. The section requires the commission to establish whether regulatory policies are at the interest of the public and modify or even repeal regulations that are not at the interest of the public. This gives FCC the powers to enact the proposed reforms9. Another proposal on the reform agenda to FCC is to ensure that enforcement of the regulations that are controversial should be determined by a different agency. A different agency should be selected to review request for merger in the communications industry and to validate whether such mergers are at the interest of the public. The selection of the FCC commissioners is in question that it is being controlled by political powers and pressure from partisan politics. Section IV: The Likely Consequences of the Proposed Change in Media Ownership Rules The idea presented by FCC on allowing media owners to form mergers is supported by the idea that this will increase diversity of the information sent. Groups supporting this reform agenda argued that limiting the provision of the media ownership and allowing stations to have a higher percentage of concentration in a given area will also give media houses the power to compete for satellite and cable broadcasting thereby ensuring quality production across the nation. There is need to ensure that quality programming is provided through full utilization of the technologies available. However, while ensuring this, the FCC has to ensure that consolidation of media houses does not occur. Consolidation poses the risk of monopoly in the industry given that big role players will take over and control the market, a matter that is not at the interest of the public. To check this, the proposed regulations will limit the kind of mergers that occur in the market. Large companies will be prevented from merging with others as this will increase their ownership to risky extents10. The control of the market will need to be checked by providing a checklist that provides for what companies will be allowed to merge and what are the minimum requirements for the same. Limiting large and established companies from forming mergers will be effective in that it will prevent anticompetitive activities. Allowing large companies such as the Times Warner and AOL to merge is allowing a single media house to have control over multiple sources of information and this may create less diversity in the messages broadcasted to the public. A coalition of ownership evident to result in higher concentration of control and market power is risky in that it may result in anticompetitive practices and affect the diversity of the information available to the public. There are two examples of countries that exhibit the dangers posed by lack of proper deregulation of the media industry. Germany is a country that has learned a lesson on the impact that concentration of ownership can have on a country. The rise of Adolf Hitler was aided by the Germany media baron, Alfred Hugenberg. Hugenberg utilized the power of mass communication through his extensive ownership of the media to sell Hitler all over Germany. The country has attempted to limit the current situation that has allowed two families to have control of the entire market of television broadcast. However, these attempts have failed due to lack of ground rules in the media law of the country11. A similar situation was seen in Italy where the former Prime Minister, Silvio Berlusconi exercised excessive control over the nation’s press. He exercised the control through his own company, Mediaset and the state owned broadcasting body RAI. Although the country has numerous rules meant to limit media ownership, the situation still prevailed due to the power of an individual that had concentrated the market12. These two situations explain the potentials problems that deregulation will pose to the future of the industry. It will result to the independent ownership and control of the media by single bodies or even individuals and apparently, there will be a potential in decreased diversity of information in the United States. The main difference between this proposal and the existing law comes handy in that mergers will be allowed. The mergers will however be allowed only between companies that are seeking to establish their presence and compete with the already established role players. Such partnerships will see the expected competition increase at the interest of the public. The proposal will see both agendas of the FCC met. That is, they will be able to improve on competition and at the same time, allow mergers that will work at the interest of the public. The proposed joint businesses between satellite communication providers should be allowed by FCC given that this area has minimum control over the kind of information to transmit. Accessing the area, the deregulation will largely promote increased competition. Deregulation will increase the advent of new inventions given that this is a technological field. Companies in this area will seek to provide the best quality of transmission given that they will be competing with others. Service providers will have to ensure that they provide the best services in terms of quality and timeliness given the competition that will be created. Basically, allowing competition in provision of satellite services will promote two main things: first, it may prevent the effect of over-competitive price pressures; and second, it may provide room for technological advances and this will increase efficiency in the market13. The proposal to make the FCC independent seeks to ensure independency in the market as well as create trust within the public. There is need to counter the power imbalance in the regulation of the broadcasting industry through making amendments that will reduce the influence of FCC as well as those of others, especially political powers. The kind of self-governing authority granted to the FCC by the congress lives a lot of questions from the public on the agenda of the commission. To create trust and ensure clear regulation policy changes, the commission must be left to run independently and other bodies selected to oversee the kind of changes that they propose. Section V Although consolidation in media had already occurred due to the effect of new technologies, the apparent choices for the consumer in media access had grown over time. A variety of information sources through which consumes can choose from are available. However, despite the variety of sources to choose from, media ownership matters a lot in that it determines the availability of such sources. Opponents of the proposed changes in the FCC feel that the process of deregulation will damage this kind of diversity in media programming and broadcasting. For example, following the deregulation of the number of stations controlled by one body, AOL/Time Warner Company owns the CNN a number of stations across cities in the United States. The consequences of such ownership are that consumers will have options to choose among various sources that are however controlled by the same company. The coverage may be governed and controlled at the interest of the company and not that of the citizen. Groups that are against the proposed reforms in the communication industry of the United States include some politicians, academics, watch groups of public matters and journalists watch groups. These groups feel that the proposed changes will harm the credibility of news and programming in that they will promote sameness and similarities in programming14. Such arguments are valid in that the effects of the changes implemented in 1996 are already evident. Further, observing countries such as Germany and Italy, it is evident that lack of proper laws on media ownership can affect the free expression of a nation given that all public communications might be controlled by single individuals at their own interest. Diversity in the media industry should be set a national and social goal that should be attained through proper dialogue and consultation. It is a matter that should be implemented through well defined policies. The interest of the FCC should be checked to create public trust and ensure that the media industry is not controlled entirely by few entities. Rather than struggling to push through their proposals, the FCC should ensure to check its initial mandate; protecting the interest of the public. Loss of competition and diversity in the communication industry will not serve the interest of the public of obtaining information from a variety of sources. References Sterling, Christopher H., and Michael C. Keith. Sounds of Change: A History of FM Broadcasting in America. Chapel Hill: University of North Carolina Press, 2008. Paglin, Max D. A Legislative History of the Communications Act of 1934. New York: Oxford University Press, 1989. United States. A History of Access Charge Policy: Reprints of FCC Week Articles, April 1982 to March 1985. Arlington, VA: Capitol Publications, 1985. Epps, Garrett. The First Amendment, Freedom of the Press: Its Constitutional History and the Contemporary Debate. Amherst, N.Y.: Prometheus Books, 2008. Zarkin, Michael J. 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