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Senate Vote Sept.16 Overturning FCC Media Ownership Rules Won’t Threaten “Free TV”

For immediate release
September 15, 2003
Susan Herold, CU, 202-238-9250
Mark Cooper, CFA, 301-384-2204, or 301-807-1623

Senate Vote Tuesday Overturning FCC Media Ownership Rules Won’t Threaten “Free TV”

Evidence Contradicts Industry’s Claim That Broadcast TV is Doomed

(WASHINGTON, D.C.) – In a last-ditch attempt to stem the overwhelming tide of public support for Tuesday’s (Sept. 16) Senate floor vote to overturn the FCC’s new media ownership rules, TV industry giants and their supporters now contend “free TV” will collapse without the consolidation of networks and independent stations and cross-ownership of TV stations and newspapers. Yet that claim is directly contradicted by a mountain of evidence before the FCC, illustrating the industry’s desperate attempt to enforce rules that threaten diversity, independence and local control of the nation’s media.
The industry and FCC are arguing against overturning the rules, claiming that as cable booms, the original “free” broadcast networks will see their audiences and profits shrink dramatically. What isn’t being explained is that these free broadcast networks are owned by a handful of media conglomerates that also own most of the successful cable networks they claim they compete with. And these media corporations, their networks and their local TV stations are incredibly lucrative endeavors.
Research by Consumers Union, Consumer Federation of America and Center for Digital Democracy found that:
 Each of the five major broadcast networks – ABC, CBS, NBC, Fox and UPN – are embedded in media conglomerates that have been able to capture two-thirds of the cable prime time audience. When it comes to all prime-time viewing, the five conglomerates control 75 percent of the viewing audience.
 FCC Chairman Michael Powell recently wrote that 17 cable and satellite networks compete with the major broadcast networks. Yet 13 of these “competitors” are owned by the same corporations that own the networks.
 The FCC’s own statistics show that the corporations that would be strengthened by the new rules already own all of prime-time’s 20 most popular cable programming services, and 19 of the top 20 most widely available cable networks.
 The number of television stations and their advertising revenues continued to grow substantially in the last two decades. As the FCC stated, “In 2000, both profits and cash flow of commercial television are positive in every category and quite robust particularly for the larger markets.”
 The four major networks’ owners rank in the top 10 leading media companies in terms of revenue. AOL (WB) is the largest media company with $28.6 billion in revenues, with more than half of it from its television operations; Viacom (CBS) was in second place this year with $16 billion in revenues; Walt Disney (ABC) was in fourth place with $9.7 billion; and News Corp. (Fox) placed seventh with $6.6 billion.
“Simply put, free TV and pay TV are completely intertwined. A handful of corporations own and control the vast majority of both,” said Gene Kimmelman, senior policy director for Consumers Union. “Networks are very profitable and their parent corporations own huge pay TV operations. Their fortunes have already been assured by federal policies that provide them with guaranteed cable channel carriage for the stations; additional cable channels for new services, and potential multi-billion payments for carriage of their digital TV services.”
More than 300,000 Americans signed petitions in recent weeks asking Congress to overturn the FCC rules, and a Third Circuit Court this month stayed the rules from going into affect due to a “significant matter of public interest.” A Senate vote Tuesday to overturn the FCC rules would:
 Restore the 35 percent national television ownership cap, which was enacted by Congress. The new FCC rules would increase that to 45 percent.
 Endorse the policy that newspapers and TV stations in the same market should not be owned by a single entity.
 Ban a single company from owning three television stations in some markets and tell the Commission to do a better job evaluating those duopolies (ownership of two stations in the same market).
Read “Free TV Swallowed By Media Giants: The Way It Really Is September 15, 2003