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Consumers Union Asks FCC to Rewrite Media Ownership Rules

Consumers Union
Consumer Federation of America

For Immediate Release:
September 4, 2003
Mark Cooper, CFA (301) 384-2204
Gene Kimmelman, or Susan Herold, CU (202) 462-6262

WASHINGTON, DC –Two of the nation’s largest consumer organizations asked the Federal Communications Commission today to reconsider and largely abandon rules that would allow for more media ownership consolidation. In a petition to reconsider, the Consumer Federation of America and Consumers Union argued that the FCC adopted the rules relying on complicated and inconsistent analytical measures that were not open to public comment. The 48 page filing also outlines a litany of instances where the agency contradicted itself to justify different parts of the rules, applied faulty reasoning, ignored the factual record and adopted rules that if implemented, will directly conflict with the public interest standard demanded by the Communications Act.
The filing represents a potential third strike against the FCC and its Chairman’s drive to allow greater consolidation of media companies. In reaction to the rules and growing public opposition, the Congress has moved to block some or all of the new rules. Yesterday, the United States Court of Appeals for the Third Circuit issued a stay of the Federal Communications Commission’s (FCC) new media ownership rules. The Court reasoned that the potential harm is so great that a full judicial hearing is needed before the rules can be allowed to go into effect.
“Today we hope to put the final nail in the coffin of these ill-considered rules,” stated Mark Cooper, Research Director of the Consumer Federation of America. “Our petition demonstrates that the rules are certain to fail when the Appeals Court considers them on the merits.”
Specifically, the petition finds that the rules:
 were developed through an illegal administrative process that denied the public the opportunity to comment on the specific substance of radically new measuring tool;
 reflect a partial, selective and faulty reading of the evidentiary record;
 are riddled with internal contradictions;
 rely on flawed analytic reasoning (largely through a “diversity index”) that produces nonsensical results that bear no relationship to reality;
 adopts approaches that are inconsistent with established antitrust practice and general principles of economic analysis, and
 are predicated on a misinterpretation of the Communications Act and First Amendment jurisprudence.
The groups gave examples in the petition of the absurd results created by the FCC’s “diversity index”:
In the New York City area, Shop at Home Incorporated TV, the Dutchess Community College TV and Multicultural Radio Broadcasting Inc. (with three radio stations) each has been given more weight than the New York Times. Again in New York, Univision TV has more weight than ABC Inc., NBC/GE, Viacom or News Corp., even when Viacom’s and News Corp.’s radio stations and newspapers are included. Univision is three times as important as the New York Times. In the Tallahassee area, the Thomasville Tribune with daily circulation just under 10,000 per day is given equal weight with the Tallahassee Democrat, with more than 50,000 daily circulation, and twice as much weight as the local CBS affiliate, which has over 50,000 viewers a day, and 59 percent of the TV market.
“The court stay is a critical victory in the ongoing struggle to prevent a massive increase in the concentration of media ownership and therefore unavoidable loss of localism and diversity,” Gene Kimmelman, Consumers Union’s Senior Director of Public Policy & Advocacy, said. “It prevents an impending wave of mergers and shifts the burden back to the Commission to act swiftly on public requests for reconsideration, so that litigation can move ahead. It also sends a strong signal that the FCC can’t be trusted to promote competition and diversity among media outlets that is demanded by both the Constitution and the American people to protect our democracy.”
An executive summary of the petition to reconsider can be found at: www.consumerfed.org/reconpetition.pdf
The full petition is available upon request.
The Consumer Federation of America is the nation’s largest consumer advocacy group, composed of over two hundred and eighty state and local affiliates representing consumer, senior, citizen, low-income, labor, farm, public power and cooperative organizations, with more than fifty million individual members.
Consumers Union, publisher of Consumer Reports magazine, is an independent nonprofit testing, educational and information organization serving only the consumer. We are a comprehensive source of unbiased advice about products and services, personal finance, health, nutrition and other consumer concerns. Since 1936, our mission has been to test products, inform the public and protect consumers