by publius
Media consolidation is a tough issue for me. Lots of very smart people I respect think it’s a serious problem. And while I’m not crazy about it, I don’t think it’s an area demanding government action.
But in the spirit of learning more, I just finished Alec Foege’s “Right of the Dial,” a book on the rise and fall of Clear Channel. And while Foege is clearly no fan of either Clear Channel or consolidation, his book didn’t really change my mind.
I’m generally skeptical of attempts to limit media consolidation for at least two reasons. First, the “consolidated” media industry still has a lot of players, even in radio. But more importantly, new technologies are emerging that provide real alternatives to these media industry players.
Take radio for instance. The argument behind the controversial move to lift some of the ownership caps is that terrestrial radio faced a lot of new competitors. Listeners now had the option of iPods, podcasts, satellite radio, Internet radio, and eventually (one hopes) wireless broadband in their cars. If radio sucked, or started spouting propaganda, then people could go elsewhere (advertisers included).
Foege spends much of the book criticizing the effects of Clear Channel’s consolidation. But it’s worth noting that, in the end, Clear Channel fell prey to these very trends. Rather than monopolizing radio, Clear Channel’s revenues flat-lined and they ultimately gave up the ghost to a private equity group. In short, the combination of a wretched product and new technology caused the market to turn on them.
So I remain unconvinced that we need a major new initiative to address media consolidation, at least in most contexts (see below). That’s not to say we should lift all existing caps. But I don’t see a strong need to lower them either.
But that said, there are some strong arguments against this conclusion. Personally, I think the most persuasive arguments against consolidation are non-economic. Consolidation, for instance, poses a particularly strong threat to localism. Foege illustrates this threat by describing a local and highly dangerous chemical spill that went unreported on local radio for hours — largely because the community had only Clear Channel networks. Needless to say, the incident wasn’t exactly a PR coup for the company’s deregulation efforts.
Emergencies aside, consolidation also harms localism by drastically reducing local news coverage – or at least by limiting local coverage to a very small number of voices. Foege notes, for instance, that Bill Clinton maintained some newspaper/TV cross-ownership bans because he claimed he would never have been president if the local anti-Clinton paper in Arkansas controlled the TV stations too.
Another point to remember in all this is that “media consolidation” is a vague concept that covers many diverse companies and situations. Government action makes more sense in some contexts than in others. For instance, ownerships limits within a local market seem more valuable than national caps. Also, consolidation across media (e.g., TV/newspaper/radio combinations) seems like a bigger problem than intra-industry consolidation (e.g., radio alone). There may well be strong economic arguments supporting this type of cross-media consolidation, but it still quite clearly harms localism and raises free speech concerns. And these latter kind of non-economic concerns simply can’t be addressed by pointing to the efficiencies of vertical integration.
So I suppose I should amend what I said above. I’m not opposed to any and all efforts to limit consolidation. But it’s important to distinguish between different types. Allowing Clear Channel to buy up a ton of radio stations nationally is a completely different animal than allowing it to control an entire town’s media, or to monopolize concert venues, which are necessarily less subject to substitutes.
But that said, there are some strong arguments against this conclusion. Personally, I think the most persuasive arguments against consolidation are non-economic.
Not to sound snarky, if you start to discover lots of non-economic things in an economic discussion, it’s time to go back and price them into your model, because they’re really economic factors.
While localism, or rather, the production of diverse niches for broadcast radio, is important, ultimately this argument _is_ also economic, because it is about demanding that the airwaves be treated as a commons. (In fact, this is close to the original logic for both broadcast television and radio regulation.)
This declaration, the airwaves are ours in common, is not about pricing things into a model, but the recognition that they are a public good, and a limited one. In many ways, its akin to net neutrality. It’s nice when the market does a good thing, but that’s no reason to surrender public goods to the whims of the market.
It’s too early in the morning for me to argue this, but I’ll just say: “A lot of players” is about ten major corporations that control almost all media in this country.
and if you want economic arguments, among other things, check out Robert McChesney’s “The Political Economy of Media.”
First, a data point.
I used to listen to radio a lot, mostly for music programming. These days I listen to NPR on my commute, and that’s about it. The rest is Ipod and streaming media off the computer.
Commercial radio sucks. It sucks for music, for news, and for anything else you might want to listen to. Maybe sports programming is OK, I don’t listen to that so I can’t tell you.
And consolidation is one of the reasons it sucks.
My two cents.
To your points:
Personally, I think the most persuasive arguments against consolidation are non-economic.
Actually, *the* argument is non-economic. Or, more properly, it’s the argument rag makes upthread.
The airwaves are a common good. They are not the property of the broadcaster, but of we, the people. So we get to say how they will be used.
They are also, still, the most common source of information for a very, very broad cross section of the population. So, it’s in our interest to insure that the broadest practical range of points of view show up there.
Market economics is a good model for thinking about the human behavior known as buying and selling. That’s not the only things humans do.
The market is not the only form of public life.
Thanks –
What makes you say this, russell? This appears to be an argument based on self-evidence, but I’m not a huge fan of those.
The airwaves being a common good doesn’t mean there’s no economics to it. It just means the money comes into play differently. My first inclination would be to examine who decides, and see who’s funneling money and/or influence their way.
I agree that anti-monopoly actions probably aren’t the right solution, but I think it would be a very positive thing for the government to promote alternatives to these big media outlets.
After all these years, we *still* don’t have low-power FM community radio. Why not?
After all these years, we still don’t have any good way for an internet radio station to access music without paying outrageous fees. Why not?
We don’t have to bust these monopolies, but we have to lift the barriers that prevent little guys from competing.
JoshY – those are very good points. Low FM radio is strictly b/c the broadcaster lobby (darth vader) has opposed them. and the copyright fees are also interest group legislation.
dems need to get much much better on this — one hope of mine is that obama’s fundraising model makes him less dependent on hollywood. and thus more willing to revisit some of our ridiculous IP laws/regulation
This is the first I’ve heard that Clear Channel had a “fall”. They still seem to be all over the place — having recently bought all the bus shelters here in DC, for example, to plaster with ads.
Sarah J,
Ten companies actually is a lot of players. It’s more than the number of competitors in most mature industries. We only have three auto manufacturers, for example. I don’t know precisely what Clear Channel’s market share is, but it’s not going to raise any red flags in terms of antitrust law.
What makes you say this, russell? This appears to be an argument based on self-evidence, but I’m not a huge fan of those.
I say they are common good because they are part of the given world. Nobody created them, they are just there, like the oceans, or the air. Because you can build a ship to sail on the ocean, or an airplane to fly through the air, doesn’t mean you own the ocean or the air.
I say that “we the people” decide how they are used because, in our polity, we are supposedly sovereign. If this was a monarchy, the king would decide. If we were a very large tribe, our tribal council would decide. We’re a republic, so we, through our elected representatives, decide how to manage things we consider to be our common possessions.
The airwaves being a common good doesn’t mean there’s no economics to it. It just means the money comes into play differently. My first inclination would be to examine who decides, and see who’s funneling money and/or influence their way.
I agree with this, and I think what you’re basically getting at here is the issue of corruption — of decisions being made to favor particular interests, rather than the interest of the public at large.
The US government is large and complex enough that anything mediated through it is subject to gaming. It happens.
The difference between an entity like the US government and one like ClearChannel is that I, as a private citizen, have a much bigger lever to apply to the government.
Other than via whatever laws or other public policies I, through my elected representatives, can impose on them, ClearChannel is absolutely unaccountable to me.
Thanks –
In answer to the “public good” questions upthread…
Staring in the 1930’s, all federally-regulated access (broadcast permits and licenses, pre-deregulation ICC grants of way for trucking companies and railroads, airline route regulation under the old CAB, etc.) was granted under statutory and regulatory language which always included “…for the public convenience and necessity.”
I know this because I spent 20 years in (pre-deregulation) radio, and another several in the pre-deregulation trucking business.
I have no idea whther the language or the concept even exists in the statutes any more, although my guess is: no it doesn’t.
Now, all of the weenie reporting regulations were a wicked bad pain in the ass, no doubt about it. And they probably prevented the businesses from being as profitable as was possible. But they *were* profitable. in most markets, a broadcast license was a permit to print money, if not the kinds of money that a Clear Channel or similar conglomerate would make in its heyday. And there was an awful lot to be said for being able to drive long distances and hear local voices fade in and out, and the music choices being made by local stations, without paying a monthly fee for sattelite radio.
In Boston, where I grew up, there is still a very powerful (CBS-owned) local news/talk presence (WBZ). But in Providence, 45 miles away, where I live now, not so much. Multiply that by hundreds of cities that aren’t top 10 in population, and I think you have to agree we’ve lost something important.
(BTW, it is exactly the same thing that is happing to print. Notice how many more AP bylines you see in even big-city papers now?)
I can own property, can’t I? I can own land, yes? Or, almost completely analogously, I can own property rights.
And, yes, water rights can probably be different, because water can move from place to place. Maybe there’s your analogy right there.
Well, no, I wasn’t going there so much as I was attempting to point out that simply sweeping this problem under the rug of governmental control is not necessarily the end-all to the problem of undue influence. Unforeseen economic effects could be corruption, but they might be something else; I just hadn’t tried to flesh out the universe of what forms they could take.
I’m somewhat aware of the history, but not all history is borne of sound judgement. I was questioning russell’s assertion, or apparent assertion, that the RF spectrum is, intrinsically, a public good. This is not the same as denying the current state of law.
I have no idea whther the language or the concept even exists in the statutes any more, although my guess is: no it doesn’t.
I don’t think the concept exists in normal public discourse anymore, let alone the law.
It was a concept that was quite common for folks in my parent’s generation. I’m not sure what happened to it.
I am, personally, by habit and general disposition a basically conservative person. The reason I identify politically as a lefty is because, in modern American conservatism, there is no place for, or consideration of, the common public good.
Folks on the left don’t always quite get it either. More often than not, the “public good” ends up turning into some kind of noblesse oblige that the more fortunate among us are obliged to provide to the less lucky.
But if it shows up anywhere at all, it shows up on the left.
To me, the idea that the citizens of the country should be able to set terms and conditions on the use of things that are, simply, given aspects of the physical world that we all live in is, in fact, as slarti put it upthread, self-evident.
How the hell else would you go about it? Every man for himself? First come first served?
But, it appears to be a concept that does, in fact, need to be stated and defended over and over and over again.
There’s more to public human life than buying and selling.
The market is not the only model for thinking about how human beings relate to each other.
There’s more to human freedom than “how much can I get away with”.
Thanks –
I can own property, can’t I? I can own land, yes? Or, almost completely analogously, I can own property rights.
Yes. And I agree, property rights is probably the closer analogy.
But the rest of us can set limits and conditions on your ownership of land.
Thanks –
“What makes you say this, russell? This appears to be an argument based on self-evidence, but I’m not a huge fan of those.”
Because it’s the foundation of our legal approach to the airwaves. It’s just a fact of our legal system, Slart. Licenses are granted and leased, not owned. The government grants such leases because the radio bands are held as a common good.
The foundation of this was the Radio Act of 1927:
This was superseded by the Communications Act of 1934:
The entire premise, again, is that the airwaves are regulated for the public good. (I could quote the initial part of the act to that effect, but it’s a bit wordy.)
I recommend the very short McChesney book, “Corporate Media and the Threat to Democracy” as a starting point for why consolidation matters. http://www.amazon.com/Corporate-Media-Threat-Democracy-Pamphlet/dp/1888363479
Here is Australia Murdoch owns %70 of newspaper circulation. There are only three commercial free to air TV stations.
Yes there is new media, but most people don’t read blogs. And in rural parts, you’re lucky to get a decent connection at all.
You better believe its an issue I care about.
P.S Have been lurking your blog for a while now and I think its one of the much better places to get info. about US politics n stuff. Well done.
They are not the property of the broadcaster, but of we, the people
Herbert Hoover stated when he was Secretary of Commerce that the airwaves belong to the public.
Slartibartfast,
You can own a transmitter, studio, antenna, tower, offices, etc.,but you can never own a broadcast license outright. When radio stations are sold, the only real object of value is the broadcast license as the rest is essentially worthless without the license. When stations are sold, an application is made to assign the license subject to FCC approval.
I worked in broadcast licensing for ASCAP for nearly twenty years. I have seen more than a few instances in which the sale of a radio station fell through because the FCC did not grant the assignment of license. These days these approvals are pretty much proforma, but in the 1980’s and 1990’s less so.
I also sat in Lowry Mayes’ office,settling an audit with him and Herb Hill, back when Clear Channel owned three radio stations. For the record, ASCAP, notwithstanding the fact that it is required to treat all similarly situated licensees alike, they tended to treat Clear Channel pretty much with kid gloves, such is the impact of a customer that pays upwards of 2-3 million a month in license fees.
Indeed, the consolidation of the radio industry clearly had an impact on the development of ASCAP’s current radio license. The major operators wanted to change the way license fees were determined, unhooking them from nearly seventy years of station revenue determining fees, coming up with a fixed formula basedon market and ratings, but capping the industry-wide total at a slightly increasing amount every year.
Small, independent stations hated, but the Radio Music License Committee, which negotiates radio license agreements with ASCAP, subject to approval by the US District Court for the Southern District of New York, is made up primarily of large radio owners, with a token independent owner or two.
So, the impact of radio consolidation extends beyond radio. It cost me a twenty year career at ASCAP.
If you want to see an even worse example of media consolidation, go to Italy. Berlusconi stills owns his media empire and as head of government, has effective control over RAI, the publicly owned networks.
I blame my chronic lack of clarity for not saying it clearly or forcefully enough that it’s not the state of law that I question, but the bald assertion that the airwaves are intrinsically public property. I welcome suggestions on how I could have made myself more clear than: I was questioning russell’s assertion, or apparent assertion, that the RF spectrum is, intrinsically, a public good. This is not the same as denying the current state of law.
Which should in no way be construed as me objecting to the current state of regulation. I just don’t automatically support it because of precedent or tradition.
It strikes as at least a reasonable approach, Slart, that the government, the chosen instrument by which the people and society get together to democratically decide how to compromise between interests, balance them, and do things for the benefit of all, as best as possible, at least in theory (the practice, we know, is inevitably imperfect), and thus should make rules in some fashion as to how a limited resource that must by its physical nature, be restricted, just as it strikes me as equally reasonable that government, on behalf of the people, make such rules on how the water of rivers and other water ways, be distributed.
I’m unclear if you think there’s a better way, and if so, I’d be curious to know what you’d suggest. Obviously there are various alternatives, including settling it by who wins a given sports game, or simply by pure monetary auction, or by war, or by lottery, but if government isn’t to be the adjudicator, who would you nominate?
But I think I’m still not properly understanding your point, which seems to be not over how the airwaves get distributed, but over… the idea that… I’m not quite sure? That they shouldn’t just belong to the person with the biggest private army?
I mean, the airwaves are physically available to anyone with a transmitter, but useless unless a specific number of people are limited to specific frequencies, or all we wind up with is endless static, in essence. I’m not really following what your question is, I guess: what’s your alternative to limiting the airwaves? Everyone should be free to transmit, so no one can receive anything but random babble that goes in and out? Or what?
Sorry for being stupid here.
“That they shouldn’t just belong to the person with the biggest private army?” should be “should just belong…?”
And I should be clearer that by “limiting the airwaves,” I mean “limiting the right to use given frequencies in a given area of reception.”
I mean, the airwaves are physically available to anyone with a transmitter, but useless unless a specific number of people are limited to specific frequencies, or all we wind up with is endless static, in essence.
This is the old way of thinking about spectrum: you have discrete blocks of frequencies over which channels of information flow. If two transmitters broadcast over the same frequency range, you end up with garbage. Until relatively recently, this was the best you could hope for.
The new model is based on spread spectrum techniques. Here, you have different transmitters essentially transmitting over a very large band but in a way that allows receivers to reliably pick out any of the individual channels. How does it work? Signal processing magic.
My guess is that Slarti is thinking about the new model. In the new world, it is not immediately clear why you need a single centralized regulatory body divvying up bits of spectrum. At least, it is much less obvious that you need such a thing.
I don’t claim to have any better ideas, Gary, and I can only point back to my original questioning that the airwaves being a common good is anything more than completely made up.
It may very well be that we’ve hit on the best possible solution. It may also be that the airwaves are a common good precisely because the notion of dividing up electromagnetic spectrum into chunks and allocating those chunks to people or corporations is an artifice. Still looks completely made up to me.
Not that there’s anything wrong with that.
No, sadly I wasn’t thinking of spread-spectrum techniques, Turbulence. Good idea, though.
It may very well be that we’ve hit on the best possible solution.
Given the technology we have, we can be sure that simple static frequency allocations are not optimal. Much of the spectrum is unused and much of what is used is only used during limited time periods.
The static model may be optimal if you’re talking about 1920s radio technology, coding theory, and governance capabilities but we’ve advanced some in all those areas. We could probably come up with a much better regulatory regime today that would be substantially unregulated, BUT the old regulatory regime facilitated the growth of powerful incumbents who now try to thwart the development of better regimes. So we end up with slow incremental evolution towards a better regulatory model.
I was questioning russell’s assertion, or apparent assertion, that the RF spectrum is, intrinsically, a public good.
Just to clarify on my end:
My assertion is not that RF spectrum is intrinsically a public good. All it is, intrinsically, is RF bandwidth. Before the last century, I’m not sure if anyone even knew it was there. Our understanding of it as a “good” of one kind or another is (dreaded word) a social construct.
My assertion *is* that, by its nature, the social construct that is most appropriate to it is public good.
The reason for that is that its a finite resource, and its a basic physical entity. It’s part of the given world, like air, land, and water.
We can think of it as a public good, and work out our best approximation of a fair way to use it, or we can think of it as a big pile of exploitable resource and arm-wrestle each other to see who gets a slice.
Where the public interest in involved, we quite commonly manage finite resources as public goods. Water, land, wildlife, what have you. Folks in NYC get into legal tussles about access to sunlight.
IMO the onus is on folks who claim that RF bandwidth should be treated as private property to show why that should be so.
Thanks –
Bear in mind that television station owners got their digital spectrum for free.
russell, have you ever set up a wifi network? It might be instructive. The FCC has declared a block of spectrum used by those systems as mostly unregulated. When I set up a wifi network at my house, I didn’t have to get a license from the FCC or anything like that; I just picked an empty channel and went for it. It turns out that even in densely populated areas, there are lots of empty channels even though the FCC only set aside a very small slice of bandwidth for wifi. What’s more, multiple wifi networks can happily coexist using the same channel. These devices are much smarter than televisions; they send tiny messages rather than a continuous stream of data which means they can tolerate losing lots of individual messages without failing (since they can just ask for the bits that didn’t make it to be resent). They can avoid lots of interference to begin with because they’re smart enough to check if someone else is transmitting before they transmit. If someone else is transmitting, they hold off for a few milliseconds.
So my question to you (and Gary and anyone else who cares to answer) is: would we better off if the FCC regulated the wifi spectrum in the same way they regulated the television or cell phone bands? I’d argue no, but I’d love to see a real counterargument. If you agree with me, then the question becomes: can we extend that sort of regulatory regime to other devices and classes of service?
One of the mildly frustrating aspects of discussing these issues is that many people have a model for how radio works that is no longer operative. If you’re stuck with a 1920s mental model, then it is difficult to sensibly discuss new regulatory regimes.
russell, have you ever set up a wifi network?
Not successfully. We have some kind of weirdo interference problem in our house, we can never get that stuff to work. Radio reception, also a problem.
More’s the pity.
Look, it may well be that technology has progressed to the point where the issue of scarcity is, plain and simple, no longer a factor in thinking about the broadcast spectrum.
In that case, all I have to say is, let a 1,000 flowers bloom. Let an infinite variety of channels stream from all of our radios and TVs. I think it would be great.
I’d start my own. Manu Chao and DJ Dolores, 24/7!!
Absent that (and I don’t think we’re really there yet), we are talking about a finite resource (even if only finite due to the technology that is currently in place). It’s a resource that, for many, many people, is their primary source of information about matters of public interest.
While all of that is true, I am in favor of not allowing one entity to control the content to the practical exclusion of others.
IMO, it actually does make a difference.
Thanks –
While all of that is true, I am in favor of not allowing one entity to control the content to the practical exclusion of others.
I guess I agree. Your comment vaguely alludes to a public policy rational that we seem to have totally ignored. Only 14% of households that watch TV get their TV over the public airwaves. To the extent that the airwaves matter for distributing public interest information, we don’t seem to take that role very seriously. The FCC doesn’t grade networks on how well they fill such a role. And in this day and age I don’t know why we’re supposed to believe that TV is a good way of informing people of anything. If the health of our democracy rests on how well TV informs the populace, then we’re done as a society.
Ok, I’ve got no quarrel with that. Thanks for clarifying.
I’d prefer that they didn’t. Wifi is, as I understand it, limited in range, so you don’t have the problems posed by a huge number of potential networks in, say, an area covered by radio stations broadcasting at several kilowatts. With Wifi, you can have several active, overlapping networks running without noticeable interference. If you were smart, you might come up with a network card that could multiplex across a number of wifi hubs. Not sure how that would work, but imagine yourself sitting on a park bench (eyeing little girls with bad intent? no, that’s not where I was going with this) with access to multiple, parallel download/upload pipes.
But then pretty soon everyone would be doing it. For all I know, that’s already here.
Anyway, I don’t see wifi as a cornering of some common good. Now, if you get so many encrypted networks running in a given area that you’re getting lots of collisions and there’s no room at all for even one open network, that might be bad for a few people. But move over twenty yards and you’re in a different place. Someone would have to do that on purpose, I think.