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.
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