Commentary

Relaxing media ownership rules conflicts with the public's right to know

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 Updated:

On Jan. 16, 2003, Charles Lewis, the executive director of the Center for Public Integrity, addressed the Forum on Media Ownership at the Kernochan Center for Law, Media and the Arts at the Columbia University School of Law in New York City (see Webcast of the event). Lewis prepared remarks for the event which, because of the time constraints, he had to summarize. We reprint his full prepared remarks here.

Thank you for inviting me to speak this morning about the Media Ownership Rules currently under review by the Federal Communications Commission.

The Center for Public Integrity is a nonprofit, nonpartisan research organization based in Washington. We investigate public interest, public service and ethics-related issues, including distortions to the political decision-making process, and we have produced more than 100 reports and 10 books since 1990. Our work has been honored by the Society of Professional Journalists or Investigative Reporters and Editors 11 times since 1996. Before founding and directing the Center for Public Integrity, I was an investigative reporter and producer for 11 years at ABC News and the CBS News program 60 Minutes.

The Center for Public Integrity does not advocate for or against government laws or legislation. The federal government in September proposed the most significant change ever in the rules regarding ownership today of the American media. It is not my purpose or prerogative today to substantively discuss those proposed rules or their impact, but instead to sound a cautionary note about the process itself.

Two people I respect enormously, Bill Kovach and Tom Rosenstiel, recently observed in a New York Times editorial that, "this shift could reduce the independence of the news media and the ability of Americans to take part in public debate." (Full disclosure: Kovach is on the Center's Advisory Board and I am a member of his Committee of Concerned Journalists). The number of independent news-gathering operations that gather original news for 280 million Americans today is small and may become smaller. And this current FCC "Notice of Proposed Rulemaking" is the latest in a deregulation process promulgated by the agency over the past 20 years, at the direct and persistent urging of the principal beneficiary, the broadcast industry.

Recent precedent is not auspicious. For example, since the landmark 1996 Telecommunications Act, in which the cable industry promised that deregulation would stimulate market competition and lower monthly cable bills for all Americans, rates shot up 45 percent, nearly three times as fast as inflation. That same law relaxed the rules on ownership of radio, and since then the two largest companies have greatly enriched themselves, increasing their number of stations owned from 130 to 1,400. In 1997, broadcasters lobbied and received portions of the digital broadcast spectrum worth, according to some estimates, upwards of $70 billion—for free.

Through all of the discussion of further deregulation of media ownership rules, and cheery assurances from media corporations that the commitment and extent of independent newsgathering will be unaffected, the current issue of CJR magazine has commented about "The Silence of the Lambs," aptly asking, "Where is the voice of the journalists?"

With the past relaxed ownership and control rules, I have not seen any evidence to credibly suggest that the quality of information provided to the American people has improved, or that the values and commitment to serious journalism in this country have changed for the better.

Indeed, fairly or unfairly, there is a widespread perception that Congress and the Federal Communications Commission have become a rubber stamp over the years for the broadcast industry. And that this latest agency proposal is a done deal, with minimal public input and consultation.

Two years ago, the Center for Public Integrity issued a report entitled, Off the Record: What Media Corporations Don't Tell You About Their Legislative Agendas, which also was the basis for a CJR magazine cover story. Our five-month investigation with half a dozen researchers revealed that, besides delivering the news, the great media companies of today have their own legislative and commercial interests, which they are not always eager to share with the American people. Not only does the media aggressively lobby and contribute to the two political parties and politicians at the federal level, they also decide whose face and voice make it onto the airwaves. Such raw power provokes fear and trepidation in the political realm.

For example, in his January 1998 State of the Union address, after decrying the campaign-fund-raising "arms race" (in which he was an active and enthusiastic participant), President Clinton proposed a major new policy that would address a big part of the problem—the high cost of campaign commercials.

"I will formally request the Federal Communications Commission act to provide free or reduced-cost television time for candidates," the president said. "The airwaves are a public trust, and broadcasters also have to help us in this effort to strengthen our democracy."

Within 24 hours, then-Federal Communications Commission chairman William Kennard announced that the FCC would develop new rules governing political ads.

But days later, the powerful broadcast corporations and their Capitol Hill allies managed to halt this historic initiative. In the Senate, incoming Commerce Committee Chairman John McCain, the Arizona Republican, and Conrad Burns, a Republican from Montana and the chairman of that panel's communications subcommittee, announced that they would legislatively block the FCC's free air time initiative. "The FCC is clearly overstepping its authority here," McCain said.

In the House of Representatives, 17 Republicans, including then-Majority Whip Tom DeLay, then-Appropriations Chairman Bob Livingston, future House Speaker Dennis Hastert, and Billy Tauzin, chairman of the House Commerce Committee, sent a blunt letter to Kennard. "Only Congress has the authority to write the laws of our nation, and only Congress has the authority to delegate to the Commission programming obligations by broadcasters," they wrote.

Ranking House Commerce Committee member John Dingell, the Michigan Democrat, also sent an opposing letter to Kennard. Faced with the very real threat that his agency's budget would be cut, Kennard had no choice but to retreat from the proposed rulemaking.

It was a humiliating and metaphorical moment for the FCC. In a very public way, the agency and the White House had been flattened "like a pancake," former FCC chairman Reed Hundt, Kennard's immediate predecessor, told me. But the threat of a shrunken budget and a congressional backlash ("[T]he likes of which would not be pleasant to the Federal Communications Commission under any circumstances," was the way Livingston described it), caused the FCC to back down. Free air time went from the fast track to the back burner.

Many politicians in power tend to fear free air time for the leg up it would give to challengers. And more than that, free air time for political candidates would affect the bottom line of a very important industry and Washington player—the media industry. It would cost broadcasters millions of dollars in lost advertising revenue. They were not about to allow a direct affront to their financial self-interest to become law.

Indeed, the media's success in handling the threat of free air time for candidates is but one of a stack of proposals that media companies have flattened like pancakes in Congress and the White House in recent years. Which is why the media is widely regarded as perhaps the most powerful special interest today in Washington—not that you are likely to read, see or hear much about it in national news media stories.

How do media corporations win friends and influence people in our nation's capital? As we noted in our media study, Off the Record, they do it the old-fashioned way, by using the time-honored techniques with which business interests routinely reap billions of dollars worth of subsidies, tax breaks, contracts and other favors. The media lobby vigorously. They give large donations to political campaigns. They take politicians and their staffs on junkets.

  • Lobbying. From 1996 to 2000, the 50 largest media companies and four of their trade associations spent $111.3 million to lobby Congress and the executive branch of the government. The number of registered, media-related lobbyists increased from 234 in 1996, the year the historic Telecommunication Act became law, to 284 lobbyists in 1999. And that year, the amount of money spent on lobbyists was $31.4 million, up 26.4 percent from the $24.8 million spent in 1996. By way of comparison, in 1998, when media firms spent $28.5 million lobbying, securities and investment firms spent $28 million, labor unions spent $23.7 million, and lawyers spent $19.1 million. The media wasn't the biggest lobbying interest (airlines spent $38.6 million, defense contractors $48.7 million, and electric utilities spent $63.7 million). But unlike the media, none of those interests has the power to determine what subjects are covered in the local paper or on the evening news.
     
  • Campaign contributions. From 1993 to June 30, 2000, media corporations gave $75 million in campaign contributions to candidates for federal office and to the two major political parties, according to an analysis of data provided by the Center for Responsive Politics. In the 2000 presidential election, Vice President Al Gore took in $1.16 million and Texas Gov. George W. Bush received $1.07 million from media interests.

    The sitting member of Congress with the biggest haul in media money—including his presidential campaign—is incoming Senate Commerce Committee chairman McCain, who collected more than $685,000 between 1993 and mid-2000. Overall, the amount of campaign cash from the media industry is skyrocketing every election cycle, which is typical of political giving in general. For example, media corporations gave $18.9 million in 1997-1998, a 61 percent increase over the previous, 1993-1994 mid-term election cycle.

    We found that no media corporation lavished more money on lobbyists or political campaigns than Time Warner. The media giant spent nearly $4.1 million for lobbying in 1999, and from 1993 to 2000, contributed $4.6 million to congressional and presidential candidates and the two political parties. The second heaviest media spender in Washington was Disney, which paid $3.3 million for lobbying and just under $4.1 million in political donations during the same periods of time. This is not a subject either company was eager to discuss. The Center's calls to Gerald Levin, the then-chairman of Time Warner, and to Michael Eisner, chairman of Disney, were not returned. Nor would the CEOs of the other big media political spenders answer our questions: Liberty Media (formerly Tele-Communications, Inc.) chairman John Malone, Viacom's Sumner Redstone, then-Seagram CEO Edgar Bronfman, Ralph Roberts, chairman of the board of Comcast Corp., DreamWorks SKG's part-owner David Geffen, and News Corp., Ltd.'s chairman Rupert Murdoch.
     
  • Junkets. From 1997 to 2000, media companies took 118 members of Congress and their senior staff on 315 trips to meet with lobbyists and company executives to discuss legislation and the policy preferences of the industry. Lawmakers and their staffs have traveled near and far, to events as close as Alexandria, Va., and as far away as Taiwan. They've spoken at anniversaries of news organizations, gone fact-finding in Cape Town, South Africa, and toured movie studios. The cumulative cost of the trips was more than $455,000. The top three sponsors of these all-expense-paid jaunts were News Corp., the National Association of Broadcasters and the National Cable Television Association. No member of Congress traveled more frequently on the media industry's nickel than Billy Tauzin, the Louisiana Republican. He and his senior staff were taken on 42 trips—one out of eight junkets the industry has lavished on Congress. In December 1999, Tauzin left with his wife, Cecile, on a six-day, $18,910 trip to Paris, sponsored by Time Warner and Instinet Corp., a subsidiary of the Reuters Group PLC, ostensibly for a conference there on e-commerce. The records don't show where they stayed in Paris, but I have a feeling it wasn't Le Holiday Inn.

    Another member attending the same meeting, Rep. John E. Sweeney, R-N.Y., reported half the costs incurred by Tauzin, $7,445. Tauzin's wife and his son Michael have accompanied him on several industry-sponsored trips to Palm Springs, Calif.; New York and New Orleans.

    Despite calls to his office and home, Tauzin declined to be interviewed. Andrew Schwartzman, a public-interest lawyer and director of the Media Access Project, who has been watching Tauzin for years, told me he is not the least bit surprised about Tauzin's trips. "Billy Tauzin is an active, knowledgeable and involved member of Congress who spends a great deal of time on telecommunications issues," he says, "But unlike some other members, he is not the least bit embarrassed about accepting large quantities of their generosity. This is the Eddy Edwards, Huey Long kind of streak in these guys of wink, wink, I'm a rogue' . . . Billy just kind of revels in it."

    The second most frequent flier in Congress courtesy of the media was Thomas J. Bliley, the Republican who chaired the House Commerce Committee. Bliley and his staff logged 19 junkets over a three year period. At the 2000 GOP convention in Philadelphia, Tauzin hosted a Mardi Gras-style celebration, complete with floats from Louisiana. The $400,000 affair, heavily attended by lobbyists and pols, was underwritten by, among others, SBC Communications Inc. Not to be outdone, Michael Oxley, now the chair of the House Financial Service Committee, threw an American Bandstand-themed bash, complete with the show's host, Dick Clark, the day before. Oxley's dance party was paid for by contributions of up to $75,000 a pop from the likes of Comsat, Satellite SuperSkyway Alliance, and SBC Communications; the total cost was estimated in the $300,000 to $400,000 range.

    The largesse extended by the media industry is not limited merely to Congress. We found that from 1995 to 2000, FCC employees were taken on 1,460 all-expenses-paid trips sponsored by media corporations and associations, costing a total of $1.5 million.

How can the Federal Communications Commission protect the broad public interest on crucial issues such as media ownership when its own employees accept free trips from companies with billions of dollars of business before the agency? Call me crazy, but I have a problem with that.

The intermeshing of public and private sectors has, of course, been an endemic problem in Washington for years, and the social and professional interaction between the media business and the government that regulates it is, not surprisingly, quite extensive. For example, Podesta & Associates (now called Podesta & Mattoon), was the outside lobbying firm representing the widest array of media behemoths. From 1996 to 2000, the company received $1.5 million as the Washington representative for Viacom, Time Warner and NBC. It is co-chaired by Tony Podesta, whose brother John happened to be the White House chief of staff. Twenty-three members of its then- staff of 33 formerly worked on Capitol Hill, for either party. One of them, Kimberley Fritts, is the daughter of the president of the National Association of Broadcasters.

No media organization spent more money lobbying or had more people covering Washington than the National Association of Broadcasters, which paid $16.9 million to persuade government officials from 1996 to 2000. NAB President and CEO Eddie Fritts was a college classmate and is a close friend of former Senate Majority Leader Trent Lott, and on occasion this relationship has been immensely helpful to the broadcasters. There were 20 registered lobbyists at the NAB, seven of whom came through the revolving door from congressional staffs, the FCC and the Federal Trade Commission. Until recently, their ranks included Kimberly Tauzin, daughter of Billy Tauzin.

Media corporations have spared no expense in Washington, hiring all of the "usual suspects" kind of big-name lobbyists: former Republican Party chairman Haley Barbour (CBS); Patton Boggs' Tommy Boggs, son of long-deceased House Majority Leader Hale Boggs and U.S. Ambassador to the Vatican Lindy Boggs, and brother of ABC News correspondent Cokie Roberts, (National Cable Television Association; Magazine Publishers of America); former Reagan White House chief of staff Ken Duberstein (Comcast, National Cable TV Association, Time Warner); former Nixon White House aide Tom Korologos (Cox Communications Corporation); former Carter White House aide Anne Wexler (Comcast, Univision Communications Inc.); and former FCC chairman Richard Wiley (CBS). After all, from copyright issues to broadband access to media ownership rules, billions of dollars were at stake for the transforming media industry.

Former Democratic Arizona Sen. Dennis DeConcini, now a partner at his own lobbying firm, said that during his time in Congress, media lobbyists were omnipresent. "I was lobbied a lot by media companies when I was in Congress," DeConcini, who left the Senate in 1995, said. "The 18 years I was there, there were very complex, sophisticated issues that demanded the time of professionals interested in this area."

Frequently, of course, corporate executives are directly involved in lobbying process, and media moguls are no different. In his recent memoir You Say You Want A Revolution, former FCC chairman Hundt recounts important conversations he had with Turner Broadcasting System, Inc., chairman and president (at the time) Ted Turner; QVC Network, Inc., chairman at the time Barry Diller; TCI chairman at the time John Malone; DreamWorks' executive Steven Spielberg; and Disney vice president (at the time) Michael Ovitz.

Hundt candidly described the atmosphere of influence peddling at his agency. "I learned quickly that the volume of lobbying defined the major issues before the agency," he wrote. "A single company might send soldiers from its regiments to the Commission as many as 100 times, visit or phone the chairman on a dozen occasions, call some member of the chairman's staff perhaps daily. Congressional staffers made tens of thousands of telephone calls to the Commission staff. Congressmen wrote letters on behalf of different parties, up to 5,000 or more a year. Sometimes, when the members wanted a particular result, they phoned the commissioners to solicit votes as they might call each other on the Hill. Smart and well-financed lobbyists also ran media strategies to persuade the Commission to write rules in their favor. Industries might spend millions of dollars on television advertising to influence a handful of commissioners."

The nature of the media's political power remains fascinating to Hundt. "The media industry does not mobilize great numbers of voters and it actually is not comprised of America's largest, economically most important companies . . ." The media's significance and political clout, he told me, comes "from its near ubiquitous, pervasive power to completely alter the beliefs of every American." Members of Congress and presidential candidates, he believes, are afraid to take on the news media directly for fear that they will simply "disappear" from the TV or radio airwaves and from news columns.

Still, no single recent media issue more poignantly portrays the clash between public and private interest than the debate over free air time for political candidates. In early 1998, before the president and FCC chairman made their rule-making move, the broadcast networks, ABC, CBS and NBC, were already targets of criticism. They were excoriated for reaping potentially billions of dollars in 1997, when Congress gave them for free their government-owned digital spectrum to use for the next generation of technology. There was a rising public clamor around the question, "Do broadcasters have public interest obligations anymore?"

Against this backdrop, television stations and networks separately have been making a financial killing from political advertising. According to data collected by a firm called Competitive Media Reporting, local and national TV political advertising in the top 75 markets alone earned broadcasters $771 million in 2000. Wall Street analysts estimate the complete political ad revenue total was probably closer to $1 billion. In fact, income from political ads has been steadily rising for twenty years—from $90.6 million in 1980 to $498.9 million in 1998.

At the same time, around the nation, news coverage of political candidates is becoming minuscule. For example, the Annenberg School of Communication at the University of Southern California discovered that, in the final three months of the 1998 California governor's race, local TV news on the subject comprised less than one-third of 1 percent of possible news time. In 1974, the amount of gubernatorial coverage in California was 10 times greater. Another USC Annenberg finding: The 19 top-rated TV stations in the top 11 markets broadcast, on average, only 39 seconds a night (from 5 p.m. to 11:30 p.m.) about political campaigns. Top stations in Philadelphia and Tampa averaged six seconds a night.

As Robert McChesney, a University of Illinois professor, wrote in Rich Media, Poor Democracy, "Broadcasters have little incentive to cover candidates, because it is in their interest to force them to purchase time to publicize their campaigns."

Recent research seems to bear this out. For example, in the New Jersey Senate primary, in which Jon Corzine spent more of his own money than any Senate candidate in U.S. history, local television stations in New York and Philadelphia made $21 million from political ads. The last two weeks of the campaign, citizens watching top Philadelphia and New York TV stations were 10 times more likely to see a campaign ad than a campaign news story.

Broadcasters, Paul Taylor, founder and executive director of Alliance for Better Campaigns, has said, "are profiteering from democracy." Since 1996, his group, co-chaired by former presidents Jimmy Carter and Gerald Ford and by former CBS News anchorman Walter Cronkite, has been calling for the networks and 1,300 TV stations to give at least five minutes of political news coverage a day during the last month before the 2000 election. Ten percent agreed in concept but ultimately only one station complied.

The FCC in 2000 still had some interest, as did a few members of Congress, who proposed requiring broadcasters to provide free air time to political candidates in campaign finance reform measures before Congress. But industry lobbyists did not give an inch to any of them. In formal comments before the agency, the National Association of Broadcasters "respectfully submits that there is no lack of political news and information available for persons who have any interest in obtaining such information. Thus, a voluntary or mandatory requirement for broadcasters to offer additional free time for political candidates is unnecessary." The Radio and Television News Directors Association stated, "Proponents of mandatory air time for political candidates would prefer that the FCC ignore altogether the First Amendment rights of broadcasters. They would have the Commission turn its back on political coverage decisions made by experienced, professional journalists."

Some newspaper editorials about the free air time proposal have been curiously consistent with the extent of their ownership of broadcasting properties. The Los Angeles Times, with no TV stations, wrote supportively of the free air time initiative. The Chicago Tribune, owned by the Tribune Co., which recently purchased the Los Angeles Times and Times Mirror, and also contributes to political candidates and parties and owns 19 TV stations, saw the issue differently.

The newspaper wrote in 1998, "It might be good if candidates didn't have to raise and spend so much money to finance broadcast ads. In that case, let Congress provide public funds to subsidize campaigns. If the public stands to gain from improved candidate access to the airwaves, the public ought to bear the cost." In other words, let the citizens pay for the ads they increasingly must watch.

The dirty little secret is that from 1996 through 1998, the NAB and five media outlets—ABC, CBS, A.H. Belo Corp., Meredith Corp., and Cox Enterprises—cumulatively spent nearly $11 million to defeat a dozen campaign finance bills mandating free air time for political candidates. One company lobbyist willing to talk to us was Jerry Hadenfeldt, who represents Meredith, owner of a dozen TV stations, 20 magazines, and publisher of more than 300 books. "Free political ads are basically picking the pockets of a select group, namely television broadcasters," he said. "They [candidates] already get the lowest available rates, and that's the way we believe it should stay."

Rep. Louise Slaughter, a New York Democrat, introduced one of the free air time bills he opposed. She apparently did not realize the extent of the industry maneuverings against her. When told that $11 million had been spent lobbying against her bill and others like it, she said, "Oh, good Lord . . . It seems excessive to me. I am absolutely astonished. They paid $11 million to kill it? Well, it sure worked, didn't it?"

So this is where we are. A regulated industry has a stranglehold over the regulator and its Congressional overseers. Not a new story in Washington, I'm afraid, but one of the reasons Americans frequently distrust government, its officials and its policies.

My simple questions here today are, have the FCC Commissioners given adequate explanation to the public about why giving billions more dollars to the existing broadcast companies is in the national interest? Has the FCC given adequate consideration to the non-economic impact of these proposed rules on our democracy and on the craft of journalism? Is the FCC sufficiently objective and independent to render such judgments, given its past history?

It is not for me to answer these questions, but to let time and history itself be the ultimate judge.

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