In more than 800 pages of comments and studies, Consumers Union, Consumer Federation of America and Free Press urged the FCC to adopt media ownership rules that encourage diverse viewpoints and ensure access to competitive, independent sources of local news and information.
Read an overview of the groups' filings with the FCC
Scroll down or follow one of the links below to read summaries of each of the 10 parts — in 39 chapters — of the Compendium:
Chapter 1: Supreme Court Jurisprudence Supports Media Ownership Limits
This chapter outlines the legal basis for limits on media ownership. The goal of media ownership policy under the First Amendment is two-fold, to promote vibrant debate and to prevent undue concentration and influence in media markets. The Courts have held that "the widest possible dissemination of information from diverse and antagonistic sources is essential to the public welfare." Limitations on media ownership are appropriate because "diversification of mass media ownership serves the public interest by promoting diversity of program and service viewpoints as well as by preventing undue concentration of economic power." While competition and economic efficiency are considerations in media policy, the other goals of media policy, such as diversity, localism, and promoting vibrant debate take precedence over "merely commercial" considerations. Because broadcast licenses give their holders powerful electronic voices that are not available to all citizens, the Courts have long accepted limitation on ownership of media outlets by those who hold broadcast licenses as "a reasonable means of promoting the public interest in diversified mass communications."
Chapter 2: The Legal and Social Bases for Localism Are Stronger than Ever
Localism has been central to broadcast policy since the inception of the industry, recognized in legislation and Supreme Court jurisprudence for over three quarters of a century. The increasing power and reach of broadcast stations and emergence of national media only reinforces the importance of policies to promote localism because the fundamental political, cultural and social needs that local media serve remain the same. Moreover, America has become a much more diverse nation over the past 30 years, increasing the need for local media to reflect the changing composition of our local communities.
Chapter 3: A Broad Positive View of the First Amendment
This analysis demonstrates that the mechanism of market-based regulation in the media system is a poor solution for the protection of First Amendment rights. This follows from a fundamental contradiction between the goals of democracy and those of market competition. It is consent and consensus through informed debate, not competition and submission through Darwinian dogfights, which is sought by the public spirited intent of the Constitution and the affirmative freedom of expression provided for the American public. The only way to claim the public right to a deliberative discussion about common affairs with guaranteed access for all citizens is to temper private control over the media system with public policies that promote a diversity of voices. This chapter concludes that the FCC should base its rules governing media ownership on an affirmative, majoritarian view of the First Amendment. Limits on media ownership should be maintained and policies undertaken to expand ownership of media outlets and viewpoint diversity.
Read the full text of Part 1 (pdf)
Chapter 4: Localism and Diversity
This chapter demonstrates that the continuing importance of localism is supported by extensive qualitative and quantitative evidence. Concentration of local markets, consolidation of media into national chains, and conglomeration across media types undermine localism and diversity. Where programming content is controlled locally, it is more responsive to community needs. Pooled news services reduce the ability of local stations to present local stories, and conglomerates reduce local-oriented content. Recent studies also show that providing relevant programming increases voter turnout. The commercial mass media have not provided a great deal of content on local public affairs. Studies of the period leading up to elections show a dearth of news coverage of local issues. Studies of local public affairs programming show that most local stations do none whatsoever and those that do provide a paltry amount. America has become much more diverse over the past 30 years, which suggests that the needs of the public have changed, increasing the importance of diversity. The number of households has increased by 67 percent in the past two decades, which is twice as fast as the increase in the population. The number of married families has declined, while single parent households have increased sharply. Finally, the racial/ethnic diversity of the population measured at the state level has increased by over 50 percent in the past 30 years, and the difference between the least and most diverse states has doubled.
Chapter 5: Media Ownership and Viewpoint
This chapter shows how academic and anecdotal evidence since the 2003 FCC order was written erases any doubt that media ownership matters in dictating viewpoints and influencing public discourse. Recent evidence strongly supports the conclusion that ownership of media outlets is extremely important and properly the object of public policy to promote diversity because owners influence what and how event are covered, may seek to influence policy processes, may exhibit "slant or bias," and may not serve the needs of all members of the community.
Chapter 6: Television Remains a Dominant Medium in Democratic Discourse
The influence of media on policy and politics has been extensively studied and documented over the past several decades. The media play a critical roll in shaping public opinion and public action in a variety of ways in both routine situations and especially during election campaigns. Television is the premier medium that affects politics and the policy process. As television replaced newspapers and radio as the dominant media, the nature of political participation and processes changed. Television absorbs huge amounts of resources as the vehicle for advertising. The journalists and spinmeisters engage in an intense "dance" in which influence and information flow back and forth. The news production cycle affects the pace of the political process, shortening time for deliberation and debate. At the same time, control over access to candidates and information gives the spinmeisters bargaining power over with the press. The linkages between ownership and media point of view and media and public opinion and public action in policy and politics underscore the continuing importance of media policy for democratic discourse.
Read the full text of Part 2 (pdf)
Chapter 7: Media Usage: Traditional Outlets Still Dominate Local New and Information
In considering media ownership limits to promote the goal of the "widest possible dissemination of information from diverse and antagonistic sources," Congress and the courts have instructed the FCC to focus attention on local media and assess the manner in which people gather news and information. This chapter shows the concern is well placed. Sources of local news and information are quite different than sources of national news. The traditional local media — television and newspapers — are the dominant sources of local news and information. The small number of people who go online for local news and information are likely to go to the Web sites of traditional media. This chapter demonstrates these patterns by reviewing recent studies of media usage. It also reports the results of two surveys conducted to explicitly distinguish the use of media for local news and information from the use of the media for national news and information. The results show that newspapers and television are by far the most frequent and important source of news and information, followed by local weeklies and radio.
Chapter 8: The Internet and Local News and Information
In Prometheus, the Court emphasized the importance of independent sources of local news and information. It questioned the relevance of the Internet as such a source. The empirical evidence shows that its doubts about the Internet as a source of local news and information were well founded. Reliance on the Internet for national and international news and information is much greater than for local news and information. Even for national and international news, it is primarily younger respondents who use it. For local news and information, even among the young, the Internet makes, at most, a small contribution. The Internet is at best a supplement for local news and information that is relied upon by a very small percentage of the population. Even those who rely on the Internet, overwhelmingly go to Web sites of traditional media, local TV and daily newspapers and national TV. Also, a review of the functions provided by traditional media, analyzed by the court and used to analyze Internet activities shows that much of the activity on the Internet lacks the attributes of journalistic enterprise.
Read the full text of Part 3 (pdf)
Chapter 9: Local Media and the Failure of Big Media's Conglomerate Model
The economics of cross-ownership between media and consolidation within media have played a central role in the debate over limits on media ownership. Although the courts have clearly stated that the pursuit of the goal of "the widest possible dissemination of information from diverse and antagonistic sources" is about much more than economics, media owners have argued that consolidation and conglomeration promote economic efficiency and by doing so a more vibrant media marketplace. However, because the public policy presumption is in favor of more independent voices, and consolidation and conglomeration reduce the number of owners in local media markets, such claims bear a heavy burden of proving that, absent such mergers, a media outlet would be seriously weakened or unable to survive. This chapter shows that in the three years since the FCC sought to relax the limits on media ownership, the premise that consolidation and conglomeration promotes economic health has been challenged by reality. Newspaper and television properties are selling at healthy prices. The cash flow multiples at which numerous properties have been sold over the past couple of years are consistent with, even higher than, is typical in these sectors. The problem facing traditional media is to develop models to distribute their content online and the solution does not involve consolidation of traditional outlets. The evidence on conglomeration of television stations and newspapers (as opposed to convergence of digital and analog distribution) shows no clear pattern of economic or journalistic benefits.
Chapter 10: Concerns About Print Journalism and Cross-Ownership
This chapter investigates the impact of current TV-newspaper cross-owned combinations on the output and quality of print and video journalism, as well as the impact on journalistic values. Using numerous real world examples, this chapter shows that cross-ownership and consolidation in general lessens the amount of diverse and antagonistic media voices to the detriment of the public good. Given the finding that the economic benefits from the formation of these combinations is in doubt, the demonstration that these relationships run counter to the goals of the Communications Act should give the FCC pause as it considers removing rules barring newspaper-television cross-owned combinations.
Read the full text of Part 4 (pdf)
Chapter 11: "The Lack of Racial and Gender Diversity in TV Station Ownership"
In the landmark Prometheus v. FCC decision, the Third Circuit chastised the FCC for ignoring the issue of female and minority ownership. But since 2003, the FCC has done very little to address the issue. The FCC has abdicated its responsibility to monitor and foster increased minority and female broadcast ownership. In fact, the Commission cannot account for the actual state of female and minority ownership. This chapter outlines recent research that provides the first complete assessment and analysis of female and minority ownership of full-power commercial broadcast television stations. Taken together, the findings of this study paint a troubling picture.
Chapter 12: "Reaching and Serving Their Communities"
Though the national aggregate ownership data is telling, data at the local market level shows an even starker picture. Minorities are vastly underrepresented at the Designated Market Area (DMA) level, even in areas where minorities are the majority. Furthermore, the data shows that as a result of the low number of minority broadcasters, many Americans remain unserved by these owners. Minority-owned stations reach just 21 percent of all U.S. TV households and just 30 percent of all minority U.S. TV households. This deprives millions of Americans from the diverse perspective that minority owners have to offer. However, despite being nearly shut out of the big network-affiliate market (minorities own just 13 of the 847 "big four" network-affiliated stations, or 1.5 percent of the total), minority owners still manage to produce local news content at levels that are equal to or exceed their non-minority counterparts.
Chapter 13: "Relaxation of Media Ownership Limits and Concentration of Media Markets Undermines Minority Ownership"
This chapter demonstrates that public policy relaxing limits ownership concentration not only fails to promote minority ownership but actually undermines it at three levels. First, the trend since rules were relaxed in the mid-1990s shows a decline in minority ownership, despite an increase in the number of overall stations. Second, examination of the stations that were sold since that change in policy shows that many sales of minority owned stations to non-minorities were made possible by directly by that change. There may have been indirect effects as well, since many of the sales that took place could have taken place prior to the change in policy, but did not. The pressures to consolidate unleashed by the relaxation of the previous limits may have pushed minority owners, who have little prospect of keeping up the trend, to sell out. Third, econometric evidence supports the proposition at the macro level that this micro-level data would suggest - greater concentration is associated with lower levels of minority ownership.
Chapter 14: "A Case Study of Why Local Reporting Matters: Photojournalism Framing of the Response to Hurricane Katrina in Local and National Newspapers"
This chapter details a study that examined the framing of the response to hurricane Katrina in local and national newspapers as part of a broader study of the importance of localism in media markets. The results show that the national papers simplified the situation and exaggerated the role of victims. The findings underscore the importance of local sources of news.
Read the full text of Part 5 (pdf)
Chapter 15: "Consolidation and Conglomeration Diminish Diversity and Do Not Promote the Public Interest: A Review of the Hearing Record in the Media Ownership Proceeding"
The record evidence in the Media Ownership proceeding does not support the claim that consolidation and/or concentration can promote the goals of the Communications Act. The FCC incorrectly interpreted evidence on both of its to key claims - that the ownership does not influence point of view and that combinations provide more and higher quality news. A close reading of the record shows that these assertions are not supported by statistically meaningful evidence. Indeed, the opposite is the case and the FCC ignored admonitions in the record that it was misinterpreting the evidence. Controlling for obvious factors, such as market size and the ranking of television stations shows that cross-owned television stations do not provide more news. The claim that purports to show higher quality of product by cross-owned stations collapses when controls are introduced. The claim that duopolies provide more news is also proves to be unfounded when compared to the behavior of other, non-duopolies. Non-duopoly stations have increased the provision of news as much as duopoly stations. The loss of independent sources of information resulting from the creation of the duopolies in terms of the quantity of news produced is much larger than the increase in news produced by the duopoly stations. In both quantitative and qualitative terms, the loss of independent news production substantially exceeds any claimed benefits for these mergers.
Chapter 16: "Consolidation and Conglomeration Diminish Diversity and Do Not Promote the Public Interest: New Evidence"
The cornerstone of the effort to relax the ownership limits is the claim by the FCC that consolidation and/or conglomeration can promote the goals of the Communications Act. Although the court in Prometheus accepted the claim, the evidence that the court based this decision upon is extremely flawed, lacking the necessary statistical controls needed to validate these claims. In fact, there is no evidence in the record that achieve routine levels of statistical significance to show that consolidation and/or conglomeration contribute to any of the goals of the Act. Subsequent, rigorous empirical evidence shows that newspaper TV combinations and duopolies do not increase the quantity or quality of local news and information available. The FCC concluded and the Court accepted the wrong conclusion. This chapter reviews recent studies in this area, and demonstrates why the portions of the 2003 Order that passed judicial review are in fact based upon deeply flawed data. This chapter also examines recent data on local TV news and public affairs programming, and constructs statistical models that examine the effects of newspaper-broadcast TV cross-ownership and television duopolies on the production of these very important types of programming. The results are clear and very robust. Cross-owned stations do not produce any more local news and public affairs programming than non-cross owned stations. Duopolies also have no effect on the production of local news and public affairs programming. The claims that these forms of consolidated media promote the goals of the Communication Act are without merit.
Chapter 17: "Faulty Reading of the Record on Program Ownership and the Broadcast Ownership Rules"
The Commission mistakenly relaxed the duopoly rule in part because it failed to treat source diversity as a separate goal or to analyze the role and state of source diversity in detail It inappropriately and incorrectly failed to examine the ownership of programming and ignored the mountain of evidence in the record that the ownership and control of programming in the television market is concentrated. The Commission arrived at the erroneous decision to triple the number of markets in which multiple stations can be owned by a single entity because it facilely and incorrectly rejected source diversity as a goal of Communications Act. However, whether we consider source diversity as a separate goal of the Act (which the Commission rejected), or as a subcomponent of the broader concept of viewpoint diversity, the underlying flaw is the failure to analyze the ownership of programs and the important role that independent ownership of programs - independent of ownership of outlets - plays in the media market. The basic problem is easiest to explain if source diversity is treated as a separate goal.
Read the full text of Part 6 (pdf)
Chapter 18: "The Challenge of Contemporary Mass Media Economics to Democratic Discourse"
Competitive media market structures promote democratic discourse, although they may not meet all the needs of society for a democratic public sphere. Unfortunately, the contemporary commercial mass media have moved far from the competitive model, tending toward oligopoly and monopolistic competition. Economies of scale and strong differences in preferences between population groups drive the commercial mass media to serve larger groups in society and under-serve minorities. Market power provides media owners with the resources to pursue their political preferences with both economic power and the power of control over the press - setting policy, hiring staff. Advertisers reinforce the tendency to narrow the focus of video content, via the targeting of preferred demographics and seeking to avoid controversy or content that might discomfort consumers. Commercialism overwhelms public interest and diverse content, and the severe tendency of the mainstream mass media to undervalue and under-serve minorities is well documented in the literature.
Chapter 19: "The Contemporary Terrain of Media and Politics Demands More Concern About Concentration of the Mass Media"
Empirical evidence compiled since the implementation of the 1996 Telecommunications Act suggests that traditional explanations of media market behavior in certain areas is no longer applicable or relevant. The loss of relevance of older media market behavior theories is largely a function of changes in the social, economic and political structure, which has rendered them largely obsolete. Many assumptions about market conditions and the behavior of media owners that were once good predictors of market structures and market output, no longer apply. Public policy must reflect social reality. Thus, it is important to give up the old theories that no longer explain reality and adopt new ones. However, the FCC continues to rely on theories that have no empirical relevance in the current social marketplace, which is increasingly becoming more heterogeneous. New theories based on recent empirical evidence suggest that the economic processes in media markets will not produce a vibrantly competitive media marketplace that serves the public interest. Furthermore, consolidation and conglomeration diminish diversity and create powerful media voices that have excessive influence. In light of the increasing heterogeneity of the population and the increasing homogeneity of political coverage, the evaluation of policies promoting increased consolidation need to be evaluated in the context of valid empirically sound media market behavior theories.
Read the full text of Part 7 (pdf)
Chapter 20: "The Critique of the FCC Approach to Measuring Market Concentration"
The United States Court of Appeals for the Third Circuit, which overturned the FCC's media ownership rules issued in 2003, accepted the proposition that the FCC should analyze media market structures and measure market concentration, but it thoroughly rejected and roundly criticized the FCC's methodology. The court sent the rules back to the FCC and outlined steps necessary to arrive at a reasonable result. This chapter describes the Court's critique of FCC's methodology and media ownership rules. The two chapters that follow propose more rational methodologies for measuring market structure and argue that concentration thresholds used in the media ownership proceeding must reflect the diversity and localism goals embodied in the Communications Act.
Chapter 21: "Building a Reasonable Measure of Market Structure"
The United States Court of Appeals for the Third Circuit, which overturned the FCC's media ownership rules issued in 2003,The Appeals Court that overturned the new media ownership rules accepted the proposition that the FCC should analyze media market structures and measure market concentration, but it thoroughly rejected and roundly criticized the FCC's methodology. The court sent remanded the rules back to the FCC and outlined steps necessary to arrive at a reasonable result. This paper describes a methodology that rigorously implements and complies with the Court's remand. The methodology described places the focus is on local news and information, takes into account the audience size of each outlet, and consistently and reasonably measures the weight of each medium.
Chapter 22: "Establishing Thresholds for Media Merger Analysis"
This chapter uses standard measures of concentration from the Department of Justice and the industrial organization literature, but argues that rules establishing thresholds for media mergers must use a higher standard than traditionally applied to mergers where the sole concern is effect on competition. This analysis starts from the goals of antitrust merger policy and media policy to answer these questions. Specifying goals is essential to evaluate the impact of any changes in policy. Antitrust merger policy is a useful starting point because it is the pre-eminent area of public policy analysis of market structure and merger impacts. However, while antitrust merger policy provides the analytic tool, the Communications Act and First Amendment jurisprudence set the ultimate goals for policy to set ownership limits on media. That is because the media mergers affect involves much more than merely commercial activities; they deeply affect the nature and quality of democratic discourse in our society.
Read the full text of Part 8 (pdf)
Chapter 23: "Media Market Concentration: The FCC's Analysis Versus a Reasonable Approach"
In outlining the path to a reasonable method of market structure analysis, the Prometheus court said the FCC must weight the media in a reasonable and consistent manner, and take audience size into account when counting voices in order to avoid "absurd, illogical and unrealistic" results. Furthermore the court rightly told the FCC that the focus should be on local news and information. This chapter describes a methodology to rigorously implement the Court's ruling. First, the issue of proper media weights is addressed using longitudinal survey data obtained with a more appropriate survey instrument than that used by the Commission. Second, and most important, a measure of market concentration that accounts for audience is constructed and used to demonstrate the absurdity of the Commission's 2003 analysis. In contrast to the FCC's findings that only one of the ten markets it examined is above the concentrated threshold and none are above the highly concentrated threshold, this analysis finds that all ten sample markets are above the concentrated threshold and eight of the ten are above the highly concentrated threshold.
Chapter 24: "The Impact of Lifting the Newspaper-TV Cross-Ownership Ban on FCC Sample Cities"
This chapter examines what would happen if the largest newspapers and television stations got even bigger by merging. These situations could become a reality if the Federal Communications Commission relaxes a cross-ownership prohibition currently under consideration. The analysis uses a methodology that reflects the recent court ruling that overturned the FCC the last time the agency attempted to relax media ownership limits. The results are stark. Citizens generally already face highly concentrated markets with few choices of news and views. Possible mergers would only make matter worse, risking both localism and democracy. Even in the least concentrated markets, any cross media merger involving the top two firms would increase concentration in excess of the Department of Justice and Federal Trade Commission Merger Guidelines. In the smaller markets, the outlook is even worse.
Chapter 25: "The Impact of Easing Multiple Station Ownership Limits on Media Markets"
The previous chapter focused on the changes in media market concentration that would likely result from FCC rule changes that permit such cross-ownership relationships. The results were clear: Markets are already very concentrated and the lifting of the cross-ownership ban would drastically increase this level of concentration, leading to outcomes that are diametric to the purposes of the Communications Act. However, the FCC's actions in 2003 lead to the obvious conclusion that the Commission's removal of the cross-ownership ban would not be the only measure of media market deregulation taken. In the 2003 Order, the FCC also relaxed limitations on TV-TV mergers. This chapter looks at the top ten TV markets and four medium-sized TV markets and projects changes in media market concentrations stemming from varying potential FCC rule-change scenarios. The analysis is complex, but there is a consistent theme among the results: most markets are already highly concentrated, and the lifting of the cross-ownership ban in concert with relaxation on limits of TV-TV mergers would dramatically increase media market concentration, resulting in a potentially devastating loss in diversity of media voices. This analysis reinforces the case against relaxing the cross-ownership ban and urges extreme caution when it comes to relaxing the limits on multiple station ownership.
Read the full text of Part 9 (pdf)
The work outlined in previous chapters that analyzed the small number of sample cities examined by the FCC suggests that that middle and smaller markets are highly concentrated and would be affected severely by newspaper-TV mergers. The larger markets are much less concentrated, but would also be adversely affected by these mergers. Ten of the top twenty markets were included in the FCC sample cities and the states studied. Part 10 presents the results of the merger analysis for various sized markets in a variety of states, and concludes with the merger analysis of the top 20 markets.
Chapter 26: Alaska
Chapter 27: Arkansas
Chapter 28: California
Chapter 29: Florida
Chapter 30: Maine
Chapter 31: Michigan
Chapter 32: Montana
Chapter 33: Ohio
Chapter 34: Oregon
Chapter 35: Pennsylvania
Chapter 36: Texas
Chapter 37: Virginia
Chapter 38: Washington
Chapter 39: The Top 20 Markets
Read the full text of Part 10 (pdf)
The marriage of Comcast and NBC is bad news for consumers. But Washington and Wall Street have already bought into the idea that it's a done deal. That's why Americans need to speak out now and stop the mega-merger!
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