Today's Communications Daily [subscription required] has a story concerning News Corp.'s plan to separate its publishing businesses from its entertainment assets. Not surprisingly, the story's focus is on the impact that the News Corp. decision may have on consideration of the FCC's decades-old newspaper-broadcast cross-ownership ban.
In my opinion, in light of all new media outlets and diversity of information sources that characterize today's media marketplace, the newspaper-broadcast cross-ownership ban is one of the most obsolete regulations (and there are many) that the agency just can't seem to get off its rule books.
But do not fear. I am not going to recite the tortured history of efforts to relax or eliminate the FCC's media ownership rules on a hot summer Friday afternoon. I am not even going to explain, as I have done many times before, why the rules should be relaxed or eliminated.
What I want to do is pretty simple. And that is to show how the mindset of the self-denominated public interest groups that oppose all efforts to relax existing media ownership restrictions is so fundamentally at odds with sound principles.
According to Communications Daily, while acknowledging that media companies are increasingly separating their assets, here is what Free Press Senior Policy Counsel Corey Wright had to say:
“Media companies are recognizing in fact that cross-ownership of TV stations and newspapers is not necessarily the best for their bottom line. Why should we bother to allow increased cross-ownership when it is not really good for anyone?”
Please let this sink in: What Ms. Wright is saying, in no uncertain terms, is that Free Press knows that cross-ownership is not really good for the firms that would prefer to adopt (perhaps to their subsequent regret) that business model. And that it is Free Press's prerogative, with the FCC's help, to save these firms from themselves by not allowing increased cross-ownership.
This is not the way our American free enterprise system is supposed to work, of course. In competitive markets – and this now includes the markets in which the newspaper-broadcast cross-ownership ban operates – firms should be allowed to organize themselves in the manner that they discern will be most efficient, economical, and productive. This marketplace freedom ultimately enhances consumer welfare – and by this I mean to include consumers who are readers, viewers, and listeners as well.
Some firms will decide, as News Corp. apparently has decided, to separate assets and de-consolidate. Others will decide to integrate assets and consolidate. Some will succeed in their strategies, and others will fail. Remember AOL-Time Warner merger that caused the public interest advocates to go apocalyptic with their doomsday scenarios?
Well, it's never doomsday for me on a Friday afternoon. But I don't want to head into the weekend with you thinking, along with Ms. Wright, that a proper reason for the FCC to retain the media ownership restrictions is to protect media companies from themselves. It is not.
News Corp.'s apparent deconsolidation decision ought to cause the FCC to think hard about the rationale for retaining outdated media ownership rules on its books.
And, as importantly, the rationale offered for such retention by one of the most vocal advocates for status quo regulation should cause the FCC to ponder hard whether its own mindset has been unduly, and wrongly, affected such misguided thinking.