Copps Makes Good on Promise to Investigate Murdoch Deal
Posted October 25th, 2007 by Tim Karr
FCC Commissioner Michael Copps is making good on a promise not to let News Corp’s acquisition of Dow Jones & Company sail through Washington unchallenged.
Earlier today, he sent a letter to FCC Chairman Kevin Martin asking for a proceeding to scrutinize the merger, which would hand News Corp. Chairman Rupert Murdoch control of the Wall Street Journal among other Dow Jones properties.
 Commissioner Copps: Murdoch Deal No Slam Dunk |
“I believe the FCC’s obligation to consider the public interest—which the agency has traditionally defined as localism, diversity and competition—requires us to consider the implications of a merger between these two media giants,” Copps wrote.
The move follows Copps’ pledge in August to investigate the merger. “I hope nobody views this as a slam-dunk,” he said in a statement as news of the acquisition was making headlines.
Copps concerns were echoed in Congress by Senators Chris Dodd (D-CT) and Byron Dorgan (D-N.D.) who both sounded the alarm about the deal’s devastating impact on quality journalism and media diversity.
“I am concerned that it will be very difficult for the Journal to offer fair and balanced reporting under the pressures of a giant-media conglomerate’” Sen. Dodd said in a statement this August.
Sen. Dorgan suggested we may need new rules to rein in national media concentration. “The proposed merger between News Corp. and Dow Jones raises the serious question of whether a single company’s concentration on a national scale should continue to be unfettered and unchecked,” he wrote in a sharply worded August 3 letter to Chairman Martin. “I believe the FCC should consider studying whether the public interest would be served if media cross-ownership rules existed at the national level.”
In his letter today, Commissioner Copps calls the Murdoch buyout unprecedented in the history of the FCC. Copps wants an official proceeding to determine “whether approval of this transaction accords without public-interest responsibilities.”
He questions whether existing media-ownership rules “are adequate to deal with this proposed transaction.” Chairman Martin is now rushing to scrap the same cross-ownership rules that might apply to the Dow Jones-News Corp. deal.
Commissioner Copps’ full letter to Chairman Martin is below:
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Dear Mr. Chairman:I write concerning the proposed News Corporation acquisition of Dow Jones & Company (publisher of the Wall Street Journal) for approximately $5.6 billion. If approved, this transaction would leave News Corp. in control of a Big Four broadcast network and two of the nation’s five largest newspapers (as well as a vast collection of cable channels, satellite networks, motion picture studios, and publishing outlets). For residents of the local New York metropolitan area, it will also mean that a single company operates two of the area’s most popular television stations and two of its most popular newspapers.
Both aspects of this transaction are unprecedented in the history of the FCC and, indeed, of the United States. It will create a single company with enormous influence over politics, art and culture across the nation and especially in the New York metropolitan area.
I propose that the FCC open a proceeding to examine the implications of this proposed acquisition on the national media market. Given what you have described as “dramatic change” in the media marketplace over the past decade, I think it is essential that the FCC determine whether approval of this transaction accords with our public interest responsibilities and whether our existing media ownership rules and precedents are adequate to deal with this proposed transaction.
The proposed transaction would appear directly to affect the New York metropolitan market in terms of localism, diversity and competition. We need to study these effects before the transaction proceeds. Additionally, we have before us two pending challenges to the number of media properties News Corp. currently owns in this market. These challenges should be acted upon expeditiously.
There is no question that News Corp. ranks today as one of the most influential media companies in the world. In addition to owning Fox Broadcasting, it holds 35 full power TV licenses in the United States, including WNYW and WWOR in the New York metropolitan area. It already owns newspapers all across the world, including the New York Post with a total paid circulation of 724,748. According to the Post’s own website, this figure makes it the “5th largest newspaper in the country” and includes “almost 500,000 … exclusive readers you can’t reach through any other New York paper.”
Nor is there any question that Dow Jones & Co. and the Wall Street Journal play a tremendously important role in both the national and New York media markets. The paper reports a total circulation of over 2.6 million, with a United States print circulation of 1.7 million. It is estimated that 302,000 of these readers live in the New York metropolitan area.
I believe the FCC’s obligation to consider the public interest—which the agency has traditionally defined as localism, diversity and competition—requires us to consider the implications of a merger between these two media giants. Indeed, the FCC has never had occasion to receive comment or do research on the important public interest issues raised by (1) a national network owner owning one or more newspapers that are read across the nation or (2) a company already operating under waivers of the newspaper-broadcast cross-ownership ban acquiring a second newspaper published in that locality. These are important issues that surely deserve serious consideration by the Commission and the American public.
I am of course aware that in 1986 and 1995 the full Commission declined to apply the newspaper-broadcast cross-ownership ban to companies found to publish “national” newspapers. FN7. However, I do not believe that this line of precedent should preclude the FCC from conducting a thorough analysis of the proposed Wall Street Journal acquisition. To begin with, both decisions were reached with very little specific economic or legal analysis—the first is only 2 pages long and the second contains a single sentence of analysis on the critical issue. In other words, these antiquated orders are no foundation on which to build a media policy for the 21st Century. Moreover, whatever one thinks about the wisdom of these earlier decisions on their merits, they clearly involved facts and public interest concerns dramatically different than those before us now.
I look forward to your response.
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