Guest Commentary: It’s time to bring back FCC rules of the ’70s

Aug 20, 2001  •  Post A Comment

I am thrilled that the Federal Communications Commission has allowed Fox Television to acquire Chris-Craft, giving it 33 stations reaching 41 percent of the country and duopolies in Los Angeles, New York and Phoenix. This leaves poor Viacom with only 40 percent of the United States.
Fox has also been granted the right to own and operate UPN, which the FCC claims will do nothing to harm its goal of diversity and competition. Who would like to bet that Michael Powell’s commission will remove all ownership caps by early 2002?
It would’ve been impossible to perceive that during the 1990s the mergers between studios and networks would ameliorate the vicious and adversarial relationships between the two. The vertical and horizontal integration created a situation for the studios that they could have never envisioned; it was a dream come true. The Justice Department, Federal Trade Commission, Congress, administration and FCC-under both Democratic and Republican administrations-have allowed and even encouraged these media consolidations that are harmful to the citizens of our country.
In the early ’80s, we had the major studios (20th Century Fox, MGM, Warner Bros., MCA/Universal, Disney, Paramount and Columbia) and the broadcast networks (CBS, NBC and ABC). But there also were lots of well-financed, independent production and distribution companies (MTM, Spelling, King World, Lorimar, Worldvision, Polygram and many more).
Is it fair to ponder why these companies are no longer in existence? Is it a coincidence that in the 1970s the FCC implemented its prime-time access rule as well as the financial interest and network syndication rules? (The FCC Report and Order makes interesting reading decades later as to just why the agency ruled in this manner.) The PTAR was rescinded on July 28, 1995, and fin-syn dissolved the following month. It appeared once again that the commission came to a politically motivated conclusion and then created reasons to justify it while the networks intensely lobbied for the repeal of both laws.
You might ask, “Who led the industry fight in the ’70s and ’80s for the retention of financial interest and syndication?” None other than Jack Valenti, the wellconnected, affable, brilliant, charming and highly paid president of the Motion Picture Association of America, who valiantly fought the networks on behalf of his studio employers.
I attended many of these studio meetings and can report that he was up to the task and did his job extremely well, but of course that was before Viacom/Paramount/CBS/UPN, AOL/Time Warner/ Turner, Disney/ABC, News Corp./20th Century Fox/The Fox Network, and GE/NBC/Paxson. What would the networks, studios and Mr. Valenti testify to now that the landscape has changed so dramatically?
Mr. Valenti, in fact, warned that deregulation would allow the networks to “grow like kudzu,” choking off all competition. In 1990 he testified, “The networks have abused their power before. They will do it again. They have not been rehabilitated. They are corporate recidivists.” While his predictions have come true, there is now “kudzu” everywhere-and what has become of the normally outspoken Jack Valenti?
Did the spectrum space ever really belong to the public, or did it belong to Wall Street? If there ever was such as thing as public interest, has it been replaced by the interests of News Corp. and Rupert Murdoch? Has the Anti-Trust Division of the Justice Department been anesthetized by a series of administrations that never saw a merger they didn’t consider efficient? Knowing the media consolidation “ship” has left port, the only “reasonable” remedy would be the re-implementation of PTAR and fin-syn. The rules certainly worked in the ’70s and ’80s, and what could be better for America now than their re-implementation?
When the FCC was established, the airwaves were to be licensed to those who would use them in the “public interest, convenience and necessity.” It does not benefit the public when it permits widespread ownership of media outlets among few companies. Diversity of ownership promotes diversity of thought, and America has thrived on diversity of thought for more than 200 years.
This diversity may not suit the Mel Karmazin model of efficiency and profitability, but it most certainly suits the best interest of the American public.
Quoting from Taylor’s Laws of Business and Life, “One should always remember: What’s the use of having power if you don’t abuse it?”
Norman Horowitz is a Los Angeles-based media consultant.