**Statement of**

**FCC Commissioner Jonathan S. Adelstein**

**Before the**

**Senate Committee on Commerce, Science, and Transportation**

**Hearing on FCC Oversight**

**June 4, 2003**

Mr. Chairman, Senator Hollings and members of the Committee, thank you
for the opportunity to testify before you today. It's great to be back
here, but, unfortunately, I do not have great things to report. It's
been a sad week for me, and I think for the country, as a dark storm
cloud now looms over the future of the American media. I'm convinced the
FCC can benefit from this careful review by Congress of our recent
decision allowing further media concentration. Since this issue goes to
the heart of our democracy, we desperately need input from members of
the world's greatest deliberative body.

On Monday, over my strong dissent, the FCC approved the most sweeping
and destructive rollback of consumer protection rules in the history of
American broadcasting.

I'm afraid democracy was not well served by Monday's decision. Allowing
fewer media outlets to control what Americans see, hear and read can
only give Americans less information to use in making up their own minds
about the key issues they face.

The decision will diminish the diversity of voices heard over the public
airwaves, which can only diminish the civil discourse and the quality of
our society's intellectual, cultural and political life. It will
diminish the coverage of local voices and local issues as media giants
gobble up local outlets and nationalize the stories they broadcast.

In the end, our new rules will simply make it easier for existing media
giants to acquire more outlets and fortify their already massive market
power. Monday's order capitulated to many of the longstanding demands of
the media companies the FCC oversees.

As media conglomerates go on buying sprees, they will accumulate
enormous debt that will force them to chase the bottom dollar ahead of
all else. This is likely to result in more sensationalism, more
crassness, more violence and even less serious coverage of the news and
local events.

The American people instinctively grasp that media concentration is not
healthy for our democracy. They know how it will affect coverage of
issues of local concern.

This is why we heard such a public outcry. Commissioner Copps and I
reached out to Americans at field hearings across the country. People
take their media very personally, and they are very articulate and
substantive in what they say. We listened to thousands of people
firsthand in city halls, schools, churches and meeting rooms. We heard a
loud and unanimous chorus that they think media concentration has gone
too far already and should go no further.

And the American people have flooded the FCC with nearly unanimous
opposition from all sides, from ultra-conservatives to ultra-liberals,
and virtually everyone in between.

In my years on the Hill, I worked on a lot of hot issues. But I've never
seen an issue on which such strong opinion is so one-sided. It's touched
a raw nerve. Three-quarters of a million people contacted the FCC, and
99.9% of them opposed further media consolidation. Of the thousands of
e-mails I personally received, I saw only one that didn't oppose
allowing further media concentration.

The American people appear united in believing that media concentration
has gone too far already and should go no further.

I've heard it said the FCC can't make its decision by polls or by
weighing postcards. I agree the FCC can't make these decisions according
to popular opinion. But our statutory mandate from you is to do what's
in the public's interest. Does that mean that we can simply dismiss
those people who took the time to alert us to their deep-seated concerns
with a passing reference? I don't think we should assume that people are
wrong about what's in their own interest unless we have overwhelming
evidence to prove it. Here, the opposite is true. There is plenty of
evidence the people are right.

We've heard opposition from people and organizations from every
political stripe, from liberal to conservative, Republican to Democrat,
and virtually everyone in between. Organizations of nearly every
political stripe have weighed in, from the National Rifle Association to
the National Organization for Women, from the Catholic Conference of
Bishops to the Leadership Conference on Civil Rights. The Parents
Television Council, Common Cause, the National Association of
Black-Owned Broadcasters, the National Association of Hispanic
Journalists, the Writers Guild, and the Association of Christian
Schools. Each of these organizations expressed grave doubt about the
wisdom of allowing greater consolidation.

We also heard from hundreds of leading musicians and performing artists,
including Tom Petty, Billy Joel, Pearl Jam, Neil Diamond, and Tim
McGraw. The Small Business Administration's Office of Advocacy worries
about the effect of our changes on small businesses. Media moguls like
Barry Diller and Ted Turner, who know the industry intimately, are
greatly concerned.

This should not be seen as a partisan issue simply because it broke down
along party lines at the FCC.

My own Dad, for example, is a Republican -- and an elected state
representative in our state of South Dakota. He fears that if media
giants swallow up locally owned outlets in rural states like ours,
citizens will see less coverage of local concerns, including the key
issues facing state governments.

He highlights a real threat to our democracy. One study found that the
combined TV coverage of all campaigns in 2000 was about seventy-four
seconds per night -- and that included local, state and federal
elections. As you all know best, people heard a lot more from political
ads, many of them negative. That just depresses turnout. Could this
media coverage help explain why half of Americans don't vote? Can anyone
seriously argue that this will get better if we allow media giants to
fortify their already massive market power?

The FCC's order assumes that economic efficiencies and cost savings from
mergers will always get channeled into better news and programming. But
it requires no steps to actually make that happen.

The majority made the leap of faith that fixed rules based on oftentimes
arbitrary numbers are the be-all and end-all of what's in the public
interest. They rejected an approach to look case-by-case,
market-by-market in favor of bright line rules. They refused even to ask
parties that seek to merge to say anything about how many news staff
would be retained, the number of hours of local programming planned,
cross-programming plans for TV duopolies or the overall impact on news
and public affairs programming.

For example, the order assumes that every time a newspaper buys a TV
station in communities where 97.7 percent of Americans live, it is in
their interest. In some cases, those mergers may actually bring some new
heft to a struggling TV station. But is that true in every case? There
are many circumstances in which such a deal eliminates an important
voice that is now serving a community. The FCC order makes no effort to
sort that out, or to require any public interest commitments whatsoever.

The order essentially assumes one TV station swallowing another will
always be of benefit in every community where 95.4 percent of the
population lives, assuming that the community does not already have a
television duopoly and depending on the success of any noncommercial
station in the market.

And it assumes that networks should be able to own stations reaching 45
percent of the population -- 90 percent if you count fully the UHF
stations that are discounted by half -- with no explanation as to how
this will help diversity or localism.

It's true that Congress and the courts forced a massive review. But they
did not force massive deregulation. The FCC had to undertake the review,
but it had a choice on the outcome. Certainly, the media markets have
changed, and our rules must keep pace. But Monday's order goes much
further than Congress or the courts required. It elects gratuitous
deregulation.

The biennial review called for in the Act provides a simple directive --
to determine whether the rules "are necessary in the public interest as
the result of competition," repealing or modifying them only if we deem
them "no longer in the public interest." The linchpin of our statutory
mandate is two words -- public interest. In the context of media
ownership, the FCC still has a special duty to protect what the Supreme
Court referred to as an "uninhibited marketplace of ideas." And the
public interest means that the American citizenry should benefit from
each decision.

To protect the public, we could have required a market-by-market,
case-by-case approach that would ensure that each merger served the
interest of the communities affected. By failing to do so, the order
went further than necessary in eliminating most of the last safeguards
the FCC had in place to protect the public.

One argument in favor of unleashing the media giants is that free
over-the-air television is threatened. That's a worthy goal, but the
rumors of its demise, widely spread, are greatly exaggerated. In
reality, just last month, broadcast network advertisers spent a record
\$9.4 billion in upfront sales for next season, up 13 percent. The Wall
Street Journal recently reported that some networks make \$600-\$700
million, though others are less profitable.

It is quite telling that the best case for consolidation is that the
networks need to make still more. It's not the FCC's job to make sure
every big TV network makes money -- that's up to network management. Our
first priority is ensuring the American people get a wide range of
diverse viewpoints.

The day we will know over-the-air TV is in real trouble is when
broadcasters start lining up to turn back their licenses. Today,
instead, the value of television stations continues to skyrocket because
these licenses are so scarce. One station in Los Angeles sold for \$800
million. Why are the networks so interested in increasing the nationwide
cap or acquiring triopolies or duopolies in local markets if this
business is on the way down?

Some argue that the concern about the threat to American democracy is
overblown since it is so strong and resilient. While our democracy is
strong and not about to crumble, does it mean we can afford to weaken
it? Doesn't it matter that only half our citizens vote? The same people
argue there is plenty of diversity already, so we can afford to lose
some. I just don't agree.

It violates every tenet of a free democratic society to let a handful of
powerful companies control our media. The public has a right to be
informed by a diversity of viewpoints so they can make up their own
minds. Without a diverse, independent media, citizen access to
information crumbles, along with political and social participation. For
the sake of our democracy, we should encourage the widest possible
dissemination of free expression through the public airwaves.

Despite the majority's assumption that technological advancements render
broadcasters just another voice in a crowd of ever-expanding and
fungible media channels, a simple fact remains. No technological
advances have made it possible for every person who wants to broadcast
in a local community to do so. Nobody yet has figured out how to
replicate the spectrum for everyone who wants to broadcast a message.
The exclusive right to use the broadcasting spectrum denies it to all
others.

It is true that many Americans now access hundreds of channels on cable
and satellite, the Internet and other media. But it turns out that the
same few vertically-integrated global media firms own the bulk of what
people see. A person can always add more electrical outlets throughout
their home, but that doesn't mean they will get their electricity from
new sources. The same goes for media outlets.

Neither the Internet nor cable changes the fact that people still get
the vast bulk of their local news and information from the same places
they always have: their local newspaper and local TV stations. And these
are the very outlets we are giving the most new flexibility to merge.

We are moving to a world where in larger markets one owner can combine
the cable system, three television stations, eight radio stations, the
dominant newspaper, and the leading Internet provider, not to mention
cable networks, magazine publishers and programming studios which could
produce the vast bulk of the programming available to those outlets.

In smaller markets, say the town of Great Falls, Montana with a
population of 56,690, under our new rules one entity could own the cable
company, the dominant television station, the dominant newspaper, and
multiple radio stations. Is that automatically in the interest of the
residents of Great Falls?

To me, the public interest means more than just efficiencies and cost
savings. Every community has local needs, local elections, local news,
local talent, and local culture. While localism reflects a commitment to
local news and public affairs programming, it also means much more. It
means providing opportunities for local self-expression and reaching out
to, developing and promoting local talent. It means making programming
decisions to serve local needs. It means allocating resources to address
the needs of the community. Localism's many virtues are hard to capture,
but may get easier to ignore as companies consolidate.

In this order, we face tradeoffs between efficiencies and other public
interest goals such as localism and diversity in the media. Guess who
wins. The social benefit of diverse, locally originated and oriented
programming and program selection to me carries a lot of weight and
calls for more individualized decisionmaking.

I don't mean to suggest that bigness is always bad, or that free
enterprise will always fail the public. There is some truth to the
arguments that my colleagues make today. There's nothing inherently
wrong with earning profits from using public property.

But when it comes to gaining even greater profits at the expense of the
cornerstones of our democracy, we must carefully question the effect on
the public. Our new rules just don't let the big get bigger, they will
effectively prevent smaller entities from breaking in.

This is far from over. You may ultimately prove more responsive to the
hundreds of thousand of citizens who have passionately pled for the
independence and diversity of their media. To paraphrase Winston
Churchill, this is not the end, or even the beginning of the end, but
just the end of the beginning.