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S. HRG. 108–957 

MEDIA OWNERSHIP 

HEARING 

BEFORE THE

COMMITTEE ON COMMERCE, 

SCIENCE, AND TRANSPORTATION 

UNITED STATES SENATE 

ONE HUNDRED EIGHTH CONGRESS 

SECOND SESSION 

SEPTEMBER 28, 2004 

Printed for the use of the Committee on Commerce, Science, and Transportation 

( 

(II) 

SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION 

ONE HUNDRED EIGHTH CONGRESS 

SECOND SESSION 

JOHN MCCAIN, Arizona, Chairman 

TED STEVENS, Alaska 

CONRAD BURNS, Montana 

TRENT LOTT, Mississippi 

KAY BAILEY HUTCHISON, Texas 

OLYMPIA J. SNOWE, Maine 

SAM BROWNBACK, Kansas 

GORDON H. SMITH, Oregon 

PETER G. FITZGERALD, Illinois 

JOHN ENSIGN, Nevada 

GEORGE ALLEN, Virginia 

JOHN E. SUNUNU, New Hampshire 

ERNEST F. HOLLINGS, South Carolina, 

Ranking 

DANIEL K. INOUYE, Hawaii 

JOHN D. ROCKEFELLER IV, West Virginia 

JOHN F. KERRY, Massachusetts 

JOHN B. BREAUX, Louisiana 

BYRON L. DORGAN, North Dakota 

RON WYDEN, Oregon 

BARBARA BOXER, California 

BILL NELSON, Florida 

MARIA CANTWELL, Washington 

FRANK R. LAUTENBERG, New Jersey 

JEANNE BUMPUS, Republican Staff Director and General Counsel 

ROBERT W. CHAMBERLIN, Republican Chief Counsel 

KEVIN D. KAYES, Democratic Staff Director and Chief Counsel 

GREGG ELIAS, Democratic General Counsel 

(III) 

C O N T E N T S 

Page 

Hearing held on September 28, 2004 ..................................................................... 1 

Statement of Senator Dorgan ................................................................................. 1 

Statement of Senator Fitzgerald ............................................................................ 40 

Statement of Senator McCain ................................................................................. 1 

Statement of Senator Nelson .................................................................................. 38 

WITNESSES

Baker, Edwin C., Professor, Nicholas F. Gallicchio Professor of Law, University of Pennsylvania Law School ........................................................................ 3 

Prepared statement .......................................................................................... 5 

Compaine, Ben, Researcher and Writer on the Information Industry ................ 6 

Prepared statement .......................................................................................... 9 

Overholser, Geneva, Curtis B. Hurley Chair in Public Affairs Reporting, 

Missouri School of Journalism, Washington, D.C. Bureau ............................... 13 

Prepared statement .......................................................................................... 16 

Thierer, Adam D., Director, Telecommunications Studies, Cato Institute ......... 17 

Prepared statement .......................................................................................... 20 

(1) 

MEDIA OWNERSHIP 

TUESDAY, SEPTEMBER 28, 2004 

U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. 

The Committee met, pursuant to notice, at 9:37 a.m. in room SR– 

253, Russell Senate Office Building, Hon. John McCain, Chairman 

of the Committee, presiding. 

OPENING STATEMENT OF HON. JOHN MCCAIN, 

U.S. SENATOR FROM ARIZONA 

The CHAIRMAN. Good morning. Today, the Committee meets for 

the tenth time during the 108th Congress to examine the issue of 

media ownership consolidation. 

Since the Committee’s last media ownership hearing, the United 

States Court of Appeals for the Third Circuit issued its decision in 

an appeal of the Federal Communications Commission media ownership rules by several media companies and public-interest 

groups. The Third Circuit found the FCC did not provide reasoned 

analysis to support its chosen local ownership limits and, therefore, 

remanded portions of the new local ownership rules back to the 

FCC for further review. 

Therefore, today the Committee will hear testimony from academics about the Third Circuit decision and what reasoned analysis policymakers should consider as it approaches these difficult 

issues. 

I look forward to hearing from today’s witnesses. 

Senator Dorgan? 

STATEMENT OF HON. BYRON L. DORGAN, 

U.S. SENATOR FROM NORTH DAKOTA 

Senator DORGAN. Mr. Chairman, thank you very much. 

Mr. Chairman, it’s true we’ve had a lot of witnesses before this 

Committee in many hearings, for which I am very appreciative. I 

think this is a very important issue, and I hope that the Federal 

Communications commissioners, at some point, will come back 

down, perhaps when we turn the year and go to a new Congress. 

But as you have correctly indicated, the Federal court has remanded these rules back to the FCC, and they are, I expect, now 

either deciding whether to appeal them or to attempt to change 

them. 

Mr. Chairman, you won’t like me to say this, perhaps, but there 

are some 30 to 40 million Americans who didn’t have an opportunity to hear your speech at the Republican National Convention. 

2 

I wish they had. In fact, I watched your speech, thought it was 

quite a good speech. But there are tens of—— 

The CHAIRMAN. Content aside. 

Senator DORGAN. Pardon me? 

The CHAIRMAN. Content aside. 

Senator DORGAN. No, no, I thought it was well done, and I 

thought the American people should have a chance to view that. 

Now, why would tens of millions not have an opportunity to view 

that? Because there are, I think, 32, 35, close to 40 million Americans who don’t have pay television or cable television. They rely on 

the broadcast channels, and the broadcast channels, networks, the 

broadcast networks, decided, this year, that they would air 3 

hours—one hour each night, for three nights of the Republican 

Convention, and 3 hours of the Democratic Convention. So, for example, the American people did not hear Barack Obama give the 

keynote speech at the Democratic Convention, they didn’t hear 

Rudy Giuliani and Senator McCain give their speeches at the Republican Convention. Mr. Chairman, you wouldn’t complain about 

that, but I will on your behalf, not so much because they didn’t air 

that specific segment, but because a couple of people made a decision about what the American people should and should not be able 

to see that evening. And it describes, once again, why concentration, I think, is not in the public’s interest. 

I read the testimony today—some of it was amusing, and some 

of it interesting. Ms. Overholser uses the term ‘‘public interest,’’ 

which, I think, is really central to the question here. The testimony 

by some suggests somehow that the airwaves belong to those who 

are using them for broadcast purposes. They don’t, in fact. There 

has always been a public interest standard, dating back to the 

1930s. It continues to exist. And yet it has very few shepherds here 

in the Congress, certainly very few shepherds at the Federal Communications Commission. And we ought to get back to the question, ‘‘What is, in fact, in the public interest?’’ And what does represent the responsibility of the Congress and the Federal Communications Commission in making certain that we have the kind of 

ownership restrictions with respect to television, radio, and broadcast properties, and also with respect to cross-ownership with 

newspapers, that serve the public interest. 

It is every bit in the realm of the interests of this Congress to 

be involved in these questions. Some will suggest today it is not. 

That’s nonsense. It is every bit within our realm to be involved in 

these questions on behalf of the American people. 

So, Mr. Chairman, thank you for calling this hearing. 

The CHAIRMAN. Thank you very much. 

Our witnesses this morning are Professor C. Edwin Baker of the 

Nicholas F. Gallicchio Professor of Law, University of Pennsylvania 

Law School; Mr. Ben Compaine of Cambridge, Massachusetts; Professor Geneva Overholser, the Curtis B. Hurley Chair in Public Affairs Reporting of the Missouri School of Journalism; and Mr. 

Adam Thierer, Director of Telecommunications Studies at The Cato 

Institute. 

Welcome to the witnesses. Thank you for appearing here today. 

Mr. Baker, we’ll begin with you—Professor Baker. 

3 

STATEMENT OF EDWIN C. BAKER, PROFESSOR, 

NICHOLAS F. GALLICCHIO PROFESSOR OF LAW, UNIVERSITY 

OF PENNSYLVANIA LAW SCHOOL 

Professor BAKER. Thank you. 

You’ve adequately stated the holding of the Third Circuit. I 

should also admit that I’m one of those without cable TV, and so 

I missed your speech, that speech—— 

The CHAIRMAN. I’ll send you a tape. 

Professor BAKER. I want to outline four reasons why legal restrictions on mass media concentration are vitally important in a democracy. 

First, the single most important reason to resist concentration in 

media ownership comes from the meaning of democracy. True democracy implies as wide as practical dispersal of power over public 

discourse. Dispersal of ownership may empirically promote diverse 

content, but, more importantly, dispersal directly creates a fairer, 

more democratic allocation of communicative power. 

This distributive value, I suggest, was probably the single most 

important consideration that prompted nearly two million people to 

write, petition, or e-mail the FCC in opposition to reducing restrictions on concentration. Without more, this value judgment provides 

a proper basis to impose any limit on media mergers in any policy 

designed to increase the number of separate owners of media entities. 

The Supreme Court approved the propriety of essentially this 

value judgment when it held that strict limits on media cross-ownership were appropriate to prevent an undue concentration of economic power in the communications realm. 

Second, the widest possible dispersal of media ownership provides two safeguards of inestimable democratic significance. Concentrated ownership in any local, state, or national community creates the possibility of an individual decisionmaker exercising enormous unchecked, undemocratic, potentially irresponsible power. Although this power may seldom be exercised, no democracy should 

risk the danger. Dispersal of ownership structurally prevents the 

potential Burlesconi effect. Dispersal also increases safety by increasing the number of ultimate decisionmakers who have the 

power to commit journalistic resources to exposing government or 

corporate corruption or identifying other societal problems. 

As the FCC put it 35 years ago, a proper objective is the maximum diversity of ownership. We are of the view that 60 different 

licensees are more desirable than 50, and even the 51st is more desirable than—51 is more desirable than 50. It might be the 51st 

licensee that would become the communicative channel for a solution to a severe social crisis. 

Third is a largely economic argument, more technical. Economic 

theory predicts that media markets will radically fail to provide 

people with the media content they want. Two facts are important 

here. 

First, one reason media entities fail to provide what people want 

relates to what economists call ‘‘externalities,’’ both positive and 

negative. For example, if many non-readers of a newspapers benefit 

by the paper’s high quality investigative journalism that deters or 

exposes corruption, those benefits to non-readers do not provide 

4 

revenue to the paper. So it has too little profit-based incentive to 

produce good journalism. 

Second, successful media entities tend to have particularly high 

operating profits. 

Given these two facts, the policy goal ought to be placing ownership in the hands of people most likely to devote a large portion 

of the media’s potentially high operating profits to providing better 

journalism rather than taking them out as profit income. Sociologically, both high and mid-level executives of publicly traded large 

media companies predictably measure their success, and are rewarded, largely based on how much profit they produce. In contrast, small, more local, more family entities, often—not always— 

often identify with the quality of their journalistic efforts and their 

service to their communities. Structurally, mergers exacerbate the 

undesirable focus on profit maximization. 

The purchaser most willing and able to capitalize the purchased 

entity’s potential profits is able to make the highest bid. But this 

high bid locks the purchaser into trying to maximize profits to pay 

for the purchase. In contrast, the original owner could choose to 

use the potential income to provide better quality products, hire 

more journalists, provide more hard news. 

Fourth, it’s a subtle point that must be put somewhat delicately. 

The ideal legislative policy involving the media is debatable. However, if a few media entities become too powerful, the likelihood diminishes that subsequent debates and legislative decisions will reflect Members of Congress’s true informed and thoughtful evaluation of the public interest. Rather, it becomes increasingly likely 

that the economic interest of these huge media corporations will 

largely control public debate and legislative outcomes. 

The Third Circuit rightly recognized that the FCC has not logically explained or justified its orders. The FCC abandoned logic 

and reality when it treats the Dutchess County Community College’s TV station as more significant than the New York Times 

combined with the Times’ local radio station. 

Now the FCC must respond to the Third Circuit. Congress can 

allow this process to run its course. Still, you could take actions to 

give the FCC greater guidance. I will put aside my own view of an 

ideal legislative policy concerning media ownership. Rather, I mention two more moderate steps that you could make. 

First, by resolution, Congress could indicate its view that the 

public interest requires the FCC to seek to prevent excessive power 

due to media ownership and to try to promote the maximum feasible dispersal of ownership consistent with economic viability and 

quality media performance. 

Second, Congress could find that media cross-ownership—a 

newspaper/broadcasting combination, for example—creates unnecessary and potentially excessive power within local media systems. 

On this basis, Congress could prohibit such cross-ownership except 

where necessary for multimedia services to be economically feasible. 

I want to end with a suggestion. The forms of democracy are 

going to survive. However, the quality, capacities, and wisdom of 

democracy are at stake in the political decisions that determine the 

structure of the communication order, especially in the decisions 

5 

concerning the structural distribution of ownership and control 

over the mass media. You have a heavy responsibility. 

[The prepared statement of Professor Baker follows:] 

PREPARED STATEMENT OF EDWIN C. BAKER, PROFESSOR, NICHOLAS F. GALLICCHIO

PROFESSOR OF LAW, UNIVERSITY OF PENNSYLVANIA LAW SCHOOL

Thank you. I very much appreciate the opportunity to testify today. 

The 3rd Circuit recently, I believe correctly, found that last year’s FCC order loosening limits on media concentration was inconsistent with the evidence, patently 

unreasonable, and internally and logically inconsistent. On that basis the 3rd Circuit stayed the FCC order and remanded to the FCC to come up with a more reasoned result or a better supported and reasoned explanation for its action. In itself, 

this 3rd Circuit decision creates no need for Congressional action. 

Still, I will outline four reasons why legal restricts on media concentration are vitally important in a democracy. If you agree, Congress could take steps that would 

give useful guidance to the FCC as it responds to the 3rd Circuit. 

First, the single most important reason to resist concentration of media ownership 

is a value judgment. True democracy implies as wide as practical a dispersal of 

power within public discourse. Diversity of ownership ought to be furthered by trying to assure that diverse sorts of people own or control media entities, an aim that 

the 3rd Circuit noted the FCC abandoned when it scrapped its only policy fostering 

minority television ownership. Dispersal of ownership not only may empirically promote diverse content. More importantly, dispersal directly creates a fairer, more 

democratic allocation of communicative power. This distributive value, I suggest, 

was probably the single most significant consideration that prompted nearly two 

million people to write, petition, or email the FCC in opposition to reducing restrictions on concentration. Of course, value judgments are not matter of empirical investigation. Rather, without more, this provides a proper basis to impose any limit 

on media mergers and any policy designed to increase the number of separate owners of media entities. The Supreme Court approved the propriety of essentially this 

value judgment when it held that strict limits on media cross-ownership was appropriate to prevent an ‘‘undue concentration of economic power’’ in the communications realm. 

Second, the widest possible dispersal of media ownership provides two safeguards 

of inestimable democratic significance. Concentrated ownership creates the possibility of individual decision-maker exercising enormous unchecked, undemocratic potentially irresponsible power in whatever local, state, or national community in 

which the media is concentrated. Although this power may seldom be exercised, no 

democracy should risk the danger. Dispersal of ownership is the structural method 

to prevent this potential ‘‘Berlusconi’’ effect. Dispersal also increases safety by increasing the number of ultimate decision makers who have the power to commit 

journalistic resources to exposing government or corporate corruption or identifying 

other societal problems. As a former FCC, echoing the Supreme Court judgment 

noted above put it 35 years ago: ‘‘A proper objective is the maximum diversity of 

ownership. We are of the view that 60 different licensees are more desirable than 

50, and even that 51 are more desirable than 50. It might be the 51st licensee that 

would become the communication channel for a solution to a severe social crisis.’’ 

Third, is a largely economic argument that I develop in material submitted along 

with my testimony. Economic theory predicts that media markets will radically fail 

to provide people with the media content they want. Two facts are important here. 

First, one reason media entities fail to provide what people want relates to what 

economists call externalities, both positive and negative. For example, if many nonreaders of a newspaper benefit by the papers’ high quality investigative journalism 

that deters or exposes corruption, those benefits to the public do not provide revenue 

to the paper so it has to little profit-based incentive to produce good journalism. Second, successful media entities tend to have particularly high operating profits. In 

this context, the policy goal ought to be placing ownership in the hands of people 

most likely to devote a large portion of the media entities’ potentially high operating 

profits to providing better journalistic products rather than trying to maximize net 

profits. Sociologically, both high and mid-level executives of publicly traded large 

media companies predictably measure their success largely by how much profit they 

produce. In contrast, smaller, more local, more family based entities often identify 

with the quality of their journalistic efforts and their service to their communities. 

In any event, the undesirable focus on profit-maximization is exacerbated by mergers. The purchaser most willing and able to capitalize the most potential profits of 

the purchased entity is able to make the high bid. But this locks in the purchaser 

6 

to trying to maximize profits. In contrast, the original owner could choose to use 

that potential income to provide better quality products—hirer more journalists, 

provide more investigative journalism and more hard news. 

Fourth is a subtle point that must be put somewhat delicately. The content of idea 

legislative policy involving the media is debatable. However, if the country allows 

a few media entities to become too powerful, the likelihood diminishes that subsequent debates and legislative decisions will reflect members of Congress informed 

and thoughtful evaluation of the public interest. Rather, it becomes increasing likely 

that the economic interests (or ideological interests, as we see in Italy) of these huge 

media corporations will be able to largely control the political debate and political 

outcomes. 

The 3rd Circuit rightly recognized that the FCC had not logically explained or justified its order. The FCC abandons logic and reality when it treats the Dutchess 

County Community College’s TV station as the equivalent in the communications 

realm of an ABC television station in NYC and more significant than the NY Times 

combined with the Times’ local radio station. 

Now the FCC must respond to the 3rd Circuit by showing that any rule changes 

are based on a realistic empirical industry analysis that takes account of market 

shares and actual industry conditions or, as I suggested, it could justify its position 

on defensible and consistent normative judgments. Congress can allow this process 

to run its course. Still, if you agreed with my arguments about media ownership, 

Congress could take actions to give the FCC greater guidance. 

I will put aside my own view of an ideal legislative policy concerning media ownership. Rather, I mention two moderate steps that you could make. 

First, by resolution, Congress could indicate its view that the public interest requires the FCC to seek to prevent excessive power due to ownership in any portion 

of the communications order and to try to promote the maximum feasible dispersal 

of ownership consistent with economic viability and quality media performance. 

Second, Congress could find, as the FCC once did, that cross-ownership of different sorts of media serving a single community—a newspaper/broadcasting combination, for example—creates unnecessary and potentially excessive power within 

local media systems. On this basis, Congress could prohibit such cross-ownership except where the FCC found them to be necessary for multi-media service to be economically feasible. 

I want to end by saying that, although the forms of democracy will survive, the 

quality, capacities, and wisdom of democracy are at stake in the political decisions 

that determine the structure of communication order, especially the decisions concerning the structural distribution of ownership and control over the mass media. 

The CHAIRMAN. Thank you very much, Professor. 

Mr. Compaine? 

STATEMENT OF BEN COMPAINE, RESEARCHER AND WRITER 

ON THE INFORMATION INDUSTRY 

Mr. COMPAINE. Thank you, Mr. Chairman, Senator Dorgan. 

My name is Ben Compaine. I’ve been tracking media-ownership 

trends since the first edition of my book, ‘‘Who Owns the Media,’’ 

was compiled in 1978. Let me note up front, I have never been employed by a major media company, nor have I been a paid consultant to one. 

I start with a very different point of view. I start by questioning 

one of the fundamental assumptions of media ownership, that it is 

more concentrated than ever. The viewpoint I take is measuring 

whether consumers of the media, all of us, have access to a greater 

universe of diverse content from more sources than 15 or 20 years 

ago, or is there a concentration resulting in fewer sources and implicitly less diversity? This applies to entertainment, culture, news, 

and opinion. I would suspect we all agree that a goal is to have 

enough players to ensure that sources and diversity are sufficient 

to satisfy small, as well as mass, audiences. 

I want to make three points today. First, that television is more 

competitive than it has ever been. Second, that radio is more conVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00010 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\81581.TXT JACKIE
7 

centrated, only in comparison to an extremely fragmented industry 

that existed before 1996. Third, that the Internet is already proving itself as a popular, ubiquitous and effective medium for expanding distribution of content, including both video and audio, for more 

players and access to more sources of information for consumers 

than we could have reasonably expected even 15 years ago. I’ll 

elaborate on each of these points. The more comprehensive data 

will be coming in a study I’ve just finished that will be published 

later this year by the New Millennium Research Council. 

Television. The viewer market-share of the three traditional television networks—CBS, ABC, and NBC—has declined substantially 

since 1980. During the 1960s and 1970s, on a typical weekday 

evening, the three networks averaged about 56 percent of all 

households with television. In 2003, on a weekday evening during 

prime time, those networks only had a 20 percent rating. Adding 

in the audiences they and their parent companies have gained 

through networks available by multichannel means, such as cable 

and satellite, in 2003, their combined audiences was less than in 

1970 and into the 1980s. 

Let me make that as clear as possible. In 2003, Viacom, with 

CBS plus all its cable networks, Disney, with ABC and all its cable 

networks, NBC with its newly acquired cable networks, account for 

18 percent fewer households during prime time than the pre-merger, pre-cable, three-network days. 

Moreover, there’s the additional competition from newer networks, including Time Warner’s WB and News Corporation’s FOX. 

The five broadcast networks together aggregate to a 26 percent rating. Adding in the rating of these five broadcast networks with the 

cable networks owned by the same corporate families, such as CNN 

and HBO, with Time Warner, the five major providers of television 

programming account for an average 53 percent rating in December 2003. That’s less than the three old broadcast networks had 

into the 1980s. 

Turn to radio. Issues need a context. Taken out of context, the 

radio has seen a substantial consolidation in the last decade. The 

largest operator owns 8.6 percent of the almost 14,000 radio stations nationwide. But the four largest aggregate under 15 percent. 

The context, however, is that of an industry that has seen an increase of six times in the number of radio stations over 35 years, 

with no meaningful change in the limits of station ownership. In 

1947, when a de facto limit of 13 stations to an owner was in place, 

there were about 1,200 stations. By 1980, the limit was 14 stations, 

but there were over 8,700 stations. A single owner could own no 

more than .16 percent of stations nationally. In 1990, by which 

time the cap had gone to 12 stations, we were closing in on 11,000 

stations. 

So it should be no surprise that, like a bottle of seltzer that had 

been well shook, when the cap was removed in 1996 the industry 

burst into a long-delayed hive of activity. Even if the ownership 

limits had been eased from 1947 into the 1990s to maintain the 

same ratio of ownership to number of stations, the cap would have 

been about 88, and the changes we have seen in recent years would 

have looked far less dramatic. 

8 

Often lost in the radio discussion is that National Public Radio, 

a loose network of more than 700 not-for-profit stations that broadcast common national programming for much of the day, would be 

the second-largest radio chain. It claims to be available everywhere 

in the U.S. 

There’s also the growing interest in national satellite television/ 

radio services. In January, they had 1.6 million subscribers. At 

their current rate of growth this year, they’re expected to reach 

four million by the end of the year. 

To be sure, the number of separate owners of radio stations in 

local markets is lower than prior to the lessening of the regulatory 

limits of the 1990s. Still, larger markets have 15 or more separate 

owners, in addition to non-commercial stations. And in most of 

even the smallest markets, there are more competitors in radio 

than broadcast television and newspapers combined. 

Finally, as a segue to my comments on the Internet, thousands 

of radio and radio-like stations are available via the Internet, stations from around the globe. Many of those with the highest 

listenership were owned by non-broadcasters. 

For the Internet, barely 10 years after its coming out as a consumer medium, has about two-thirds of Americans online for everything from e-mail to government forums to shipping, porn, family 

photos, and watching television. The Internet has already had a 

profound impact on access to information. 

Of the five largest media companies, the websites of only one— 

Time Warner—are among the top ten organizations whose websites 

get the most unique visitors per month. The sites run by the Federal Government agencies are among the most frequented. 

The number of hours spent listening to Internet radio grew by 

triple digits between 2003 and the same period this year. Users 

with broadband, more than half of Internet users now, spend far 

more time using the Internet radio than dial-up users. In addition, 

new devices are becoming available to make Internet radio accessible apart from personal computer, including access via various 

wireless technologies. Indeed, video and film via the Internet are 

on the verge of becoming mainstream. Devices are on the market 

that allow even today’s broadband users to download movies and 

video programming for storage on personal video recorders for 

viewing at their convenience. 

So what does this have to do with the Third Circuit? The Third 

Circuit was looking for new ways of looking at things, new ways 

of justifying actions of the FCC. About a year ago, this Committee 

heard testimony from my friend Eli Noam. He has completed some 

landmark work on the revenue side of the media industry. It is 

helpful, but only part of the mosaic that is media competition. A 

substantial piece of the debate must be on the sources of content 

and distribution avenues that are readily and inexpensively available to most consumers. We need to look beyond what percentage 

of the audience watches what company’s shows at any given time. 

I think a more important measure is what viewers and listeners 

can, should they choose to do so, just as easily watch or listen to 

content from a reasonable number of other sources. Mass media, 

after all, means that it caters to a mass interest. It is unlikely that 

9 

there should be, or could be, 20 television shows on at the same 

time that are all mass-interest. 

As television viewers, most of us, at any given moment, are in 

the 75 percent that is watching one of the programs that may derive from a small number of providers. But, at other times, you’re 

a part of the other 25 percent that is divided into many small audiences watching one of the many other providers. Both the 75 percent and the 25 percent are not the same people all the time. 

So where does that leave me with some policy issues? I have one 

observation and question. The observation is that Congress certainly has the prerogative, but I suspect it cannot micro-manage, 

effectively, television and radio regulation. This is perhaps what 

Senator Dorgan was alluding to. I think that technology and industry are changing too fast for the way Congress does, and should, 

work. I believe the FCC understands forces and trends well, and 

should be given latitude to do its job. This is a cumbersome process, as is most of democracy, but the courts have served as a viable 

check on, as well as a motivator to, the Commission. 

Finally, my question may be more controversial. When almost 90 

percent of households view television via a cable or satellite connection—90 percent—why are we—and most of the 10 percent are 

folks like Professor Baker, who choose not to get it—why are we 

still making a regulatory distinction between broadcast and other 

avenues of video distribution? There is a certain paradox in CBS 

being fined for the Janet Jackson Super Bowl fiasco, when more 

than 90 percent of those viewing it were doing so over cable or satellite. If ESPN had carried the same thing, there would have been 

no fine, though perhaps the same controversy. 

The value of a television broadcast license today is almost exclusively in the must-carry mandate that goes with it. I’ll bet that if 

you gave broadcasters the right to retain that—which I’m not urging, but if you gave them the right to keep must-carry but turn off 

their transmitters, that the FCC would be flooded with returned 

spectrum as licensees would opt to jettison what little is left of 

their public DC service obligation, as well as regulation, and move 

their operation directly to a multichannel platform. 

Thank you, and I’ll be delighted to answer any questions. 

[The prepared statement of Mr. Compaine follows:] 

PREPARED STATEMENT OF BEN COMPAINE, RESEARCHER AND WRITER ON THE

INFORMATION INDUSTRY

My name is Ben Compaine. I’ve been tracking media ownership trends since the 

first edition of my book, Who Owns the Media?, was compiled in 1978. Let me note 

up front that I have never been employed by any major media company nor have 

I been a paid consultant for any major media company. 

The concerns you address today about media ownership are not new ones. In 1978 

the Federal Trade Commission held two days of public hearings in this city as part 

of its investigation of mergers and acquisitions in publishing. After shifting through 

the anecdotal stories of the critics and the pessimistic scenarios of doomsayers, the 

FTC under President Carter could find no basis for any rule making, policy changes 

or legislative suggestions. 

But the focus in 2004 is on television and radio—areas which have a richer history and basis of government regulation and court involvement. So this morning I 

will restrict my comments to these areas. 

I start by questioning one of the fundamental assumptions of media ownership: 

that it is more concentrated than ever. Typical is a Seattle Times editorial last 

March that stated flatly, ‘‘The news industry in America is already far down the 

10 

road to media concentration.’’ In the same editorial they cite CNN, Fox News, National Public Radio—all separately owned sources of news that have been added to 

the media menu in the last two decades. None have been subtracted. 

The viewpoint I take is measuring whether consumers of the media—all of us— 

have access to a greater universe of diverse content from more sources than 15 or 

20 years ago. Or is there a concentration resulting in fewer sources and implicitly 

less diversity? This applies to entertainment, culture, news and opinion. I suspect 

we would all agree that a goal is to assure enough players to ensure that sources 

and diversity are sufficient to satisfy small as well as mass audiences. 

I want to make three points today: 

First, that television is more competitive than it has ever been, in number of 

different networks and owners of networks. The audience is more fragmented 

than it has ever been. Far from being more concentrated, by important measures it is far less so. 

Second, that radio is more concentrated only in comparison to an extremely 

fragmented industry that existed before 1996. No other industry could have expanded 10 fold and still have no owner hold more properties at the end than 

at the start of that period. In absolute terms radio is still highly competitive 

and as diverse as ever. 

Third, that the Internet is already proving itself as a popular, ubiquitous and 

effective medium for expanding distribution of both video and audio for more 

players and access to more sources of information for consumers than we could 

have reasonably expected even 15 years ago. And the technology continues to 

improve to provide more competition for existing players. 

I will elaborate briefly on each point. More comprehensive data on these and additional points are in a paper that I just completed that will be made available by 

the New Millennium Research Council here in Washington within a few weeks. I 

urge you to look through that paper. 

Television 

The viewer market share of the three traditional television networks—CBS, ABC, 

NBC—has declined substantially since 1980. During the 1960s and 1970s, on a typical weekday evening, the three networks on average were watched by about 56 percent of all households with televisions. (See Figure 1) In 2003 on a weekday evening 

during prime time those networks had only a 20 percent rating. Adding in the audiences they and their parent companies have gained through networks available by 

multichannel means such as cable or satellite, in 2003 their combined audience was 

less than in the 1970s and into the 1980s. 

11 

Source: Ben Compaine, ‘‘Debunking Media Consolidation Myths: Competition in the Media Industry,’’ New Millennium Research Council, Washington, D.C., 2004. Copyright c2004 Ben 

Compaine. 

Let me make that as clear as possible. In 2003, Viacom, with CBS plus all its 

cable networks, Disney, with ABC and its cable networks, and NBC, with its newly 

acquired cable networks, accounted for 18 percent fewer households during prime 

time than in the pre-merger, pre-cable three network days. 

Moreover, there is additional competition from newer networks, including Time 

Warner’s WB and News Corporation’s Fox. The five broadcast networks together aggregated to a 26 percent rating. Adding in the rating of these five broadcast networks with the cable networks owned by the same corporate family (e.g., CNN, 

HBO, etc. with WB), the five major providers of television programming accounted 

for an average 51 percent rating in December 2003. This was less than three broadcast networks had into the 1980s. 

In television we all know that there are orders of magnitude more choices today 

than 25 years ago and, even with numerous acquisitions and startups by the old 

networks and their new parents, we have more networks, from more owners than 

in the days of three networks and seven station limits for any owner. 

Radio 

On to radio. Issues need a context. Taken out of context, the radio industry has 

seen substantial consolidation in the last decade. The largest operator of radio stations in 2004 owned about 8.6 percent of the almost 14,000 radio stations nationwide. The four largest groups owned under 15 percent of all stations, a total not 

even close to any level of oligopoly by antitrust standards. 

The context, however, is that of an industry that had more than tripled in the 

number of stations over three decades with no change in the limits of station ownership. In 1947, when a de facto limit of 13 stations to an owner was in place, there 

were about 1200 radio stations. By 1980 the limit was the same, but there were over 

8700 stations. A single owner could hold no more than 0.16 percent of stations naVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00015 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\81581.TXT JACKIE

928COMP1.eps
12 

tionally. In 1990, by which time the cap had been raised to 12 stations, we were 

closing in on 11,000 stations. 

So it should be no surprise that, like a bottle of seltzer that had been well shook, 

when the cap was removed in 1996 the industry burst into long delayed hive of activity. Even if the ownership limits had been eased from 1947 into the 1990s to 

maintain the same ratio of ownership to the number of stations, the cap would have 

been about 88 and the changes we have seen in recent years would have looked far 

less dramatic. 

Often lost in the radio discussion is that National Public Radio, a loose network 

of more than 700 not-for-profit radio stations that broadcast common national programming for much of the day, would be the second largest radio chain. It claims 

to be available everywhere in the U.S. There is also the growing interest in the national satellite-distributed radio services. In the January they had 1.6 million subscribers. At their current rate of growth that is expect to reach 4 million by the end 

of the year. 

To be sure, the number of separate owners of radio stations in local markets is 

lower than prior to the lessening of regulatory limits in the 1990s. Still, larger markets have 15 or more separate owners—in addition to noncommercial stations—and 

in most of even the smallest markets there are more competitors in radio than television and newspapers combined. 

Finally, as a segue to my comments on the role of the Internet, thousands of radio 

and radio-like stations are available via the Internet. Stations are available from 

around the globe. Many of those with the highest listenership were owned by nonbroadcasters. About 40 percent of listeners accessed stations from outside their local 

market. 

Internet 

Barely 10 years after its ‘‘coming out’’ as a consumer medium, about two-thirds 

of Americans are using the Internet for everything from e-mail to news to weather 

to government forms to shopping, porn, sharing family photos, listening to radio and 

watching ‘‘television.’’ The Internet already has profound implications for access to 

information. 

Of the five largest media companies, the websites of only one (Time Warner) are 

among the top 10 organizations whose websites get the most unique visitors per 

month. The sites run by Federal Government agencies are among the most frequented. 

In 2004 for the first time more Internet household had broadband than used dialup connections. With research that shows that households with always-on 

broadband used the Internet more than narrowband users, the expectation is that 

Internet access for information, commerce and communications will continue to 

grow. 

The number of hours spent listening to Internet radio grew by triple digits between 2003 and the same period in 2004. Users with broadband spend far more 

time using Internet radio than dial-up users. 

In addition, new devices are becoming available to make Internet radio accessible 

apart from a personal computer, including access via various wireless technologies. 

Indeed, video and film via the Internet are on the verge of becoming more mainstream. As some of the local telephone carriers upgrade their systems with fiber 

optic cable to the curb or the home, the transmission speed of downloads will be 

competitive with cable and satellite services. Devices are on the market that allow 

even today’s broadband users to download movies and video programming for storage on personal video recorders for viewing at their convenience. 

Need to Consider Choices Available, Not Choices Made 

About a year ago this committee heard testimony from my friend Eli Noam. He 

has completed some landmark work on the revenue side of the media industry. It 

is helpful, yet only part of the mosaic that is media competition. A substantial piece 

of the debate must be on sources of content and distribution avenues that are readily and inexpensively available to most consumers. We need to look beyond what 

percent of the audience watches what company’s shows at any given time. A more 

important measure is whether viewers and listeners can, should they choose to do 

so, just as easily watch or listen to content from a reasonable number of other 

sources. ‘‘Mass media’’ after all, means that it caters to a mass interest. It is unlikely that there should be 20 television shows on at the same time that are all 

mass interest. 

As television viewers, most of us at any given moment are in the 75 percent that 

is watching one of programs that derive from a small number of providers. But at 

other times, we are part of the other 25 percent that is divided into many small 

13 

audiences watching one of the many others providers. Both the 75 percent and the 

25 percent are not the same people all the time. 

Policy Issues 

My findings lead me an observation and a question for policy-makers: 

• The observation is that while Congress certainly has the prerogative, it cannot 

micromanage effectively television and radio regulation. The technology and industry are changing too fast for the way Congress does and should work. I believe the current FCC understands the forces and trends well and should be 

given latitude to do its job. Though a cumbersome process—as is most of democracy—the courts have served as a viable check on as well as motivator to the 

Commission. 

• My question may be more controversial. When almost 90 percent of households 

view television via a cable or satellite connection, why are we still making a 

regulatory distinction between broadcast and other avenues of video distribution? There is a certain paradox in CBS being fined for the Janet Jackson Super 

Bowl fiasco when more than 90 percent of those viewing were doing so over 

cable or satellite. If ESPN had carried the same thing there would have been 

no fine (though perhaps the same controversy). The value of a television broadcast license today is almost exclusively in the ‘‘must carry’’ mandate that goes 

with it. If that were retained should broadcasters be allowed to turn off their 

transmitters, my hunch is that the FCC would be flooded with returned spectrum as licensees would opt to jettison what little is left of their public service 

obligation and regulation and move their operation directly to a multichannel 

platform. 

Thank you for having me here. I expect I’ve raised as many questions as I’ve answered and would be delighted to respond to any you have, now or later. 

Benjamin M. Compaine 

Ben Compaine is a researcher and writer on issues of the economics and technologies of the information industry. He has been a Research Consultant for the 

Program on Internet and Telecoms Convergence at MIT as well as executive director 

of the Program on Information Resources Policy at Harvard University. From 1994 

to 1997 he was the Bell Atlantic Professor of Telecommunications at Temple University. From 1986 to 1994 he was President and Chief Executive of Nova Systems Inc., 

a software firm. He is the author, co-author or editor of 10 books. His best known 

book, Who Owns The Media? was published as an all-new third edition in 2000. 

Other books include The Digital Divide: Facing a Crisis or Creating a Myth? (2001) 

and The Information Resources Policy Handbook (1999). His articles have appeared 

in trade, popular, and scholarly journals, including Telecommunications Policy, 

Science Digest, Foreign Policy, Reason, Daedalus and the Journal of Communication. His research and teaching interests include Internet and telecommunications 

policy, mass media economics, and the social and cultural implications of changing 

information technologies. A political science major at Dickinson College, he received 

his M.B.A. from Harvard University and Ph.D. from Temple University. He has 

been a consultant and invited speaker at conferences and seminars in Europe, South 

America, Asia, Australia as well as in the United States and Canada. 

The CHAIRMAN. Thank you. 

Professor Overholser? 

STATEMENT OF GENEVA OVERHOLSER, CURTIS B. HURLEY 

CHAIR IN PUBLIC AFFAIRS REPORTING, MISSOURI SCHOOL 

OF JOURNALISM, WASHINGTON, D.C. BUREAU 

Professor OVERHOLSER. Thank you, Mr. Chairman. Good morning, Senators. And thanks very much for the opportunity to be here 

with you. It really is an honor. 

I have to tell you that despite my typically lengthy academic 

title, in all honesty, the experience that I bring to this table this 

morning is in 35 years as a newspaperwoman, including as editor 

of the Des Moines Register. And it is experience that makes me 

care a great deal about the state of the media in the country today, 

and I appreciate your attention to this matter. 

14 

I would like to make one primary point. The story of media in 

our country today is very much like the story of the American diet. 

We have more different kinds of food than ever, more widely available than ever, yet many Americans are failing to get adequate nutrients, even as we grow fatter. We are overfed, but we are undernourished. 

The same, I would add, is true of media. There are ever-more numerous ways to get information, but that is a very different thing 

from having an improved media diet. We are bombarded with information, but we are starving for journalism. It is journalism I hope 

this Committee will concern itself with, the original production of 

content serving the public interest. This is expensive to produce, 

and it is produced only by owners who believe it worth investing 

in. These owners are in decreasing supply. 

They are disappearing in large part because the media-company 

owners find themselves compelled to return profits few other industries can even dream of. As long-time editor Harold Evans has put 

it, ‘‘Media companies are not having trouble staying in business; 

they’re having trouble staying in journalism.’’ 

The FCC has it in its hands to make matters worse by enabling 

media owners to take their companies still further from the concerns and needs of local citizens. I doubt that I need to prove to 

this, of all groups, that the presence of greater numbers of media 

outlets has not ensured improved media performance. Certainly, 

the public thinks it has not. 

A new Gallup Poll found media credibility at its lowest point in 

decades. Fifty-five percent of respondents said they have either 

‘‘not very much’’ confidence or ‘‘none at all’’ in the media’s fairness 

and accuracy. 

Nor do my colleagues in the Academy report improved media 

performance. Again and again they find that straight news content 

has given way to celebrity and crime news. Stories with public-policy content decrease; conflict and sensation take their place. 

These trends hold across all media in no small part because 

these new kinds of stories are far cheaper to produce. Now that the 

business of media is increasingly business, rather than news, cuts 

in news-gathering staff have become the norm, especially in television and radio and news magazines, but also, alas, in newspapers. There is a burgeoning of media outlets, but a constricting 

of journalism. As the Report on the State of the News Media 2004 

put it, ‘‘Much of the new investment in journalism today, much of 

the information revolution generally, is in disseminating the news, 

not in collecting it.’’ 

I’m here to speak specifically about newspapers, whose decline in 

importance is greatly overstated. Newspapers continue to be important, first, in sheer numbers of readers. On any given Super Bowl 

Sunday, more Americans read their Sunday paper than watch the 

game, and I don’t hear a lot of talk about football’s demise in this 

country. Newspapers continue to be important, too, in the influential role they play in citizens’ lives. A Consumers Union study this 

year found that Americans rely on newspapers much more than 

other media for local news and information. Finally, newspapers influence other media to a substantial degree because of the size of 

their news-gathering resources. 

15 

Yet newspapers are undergoing great strains due to the pressure 

of maintaining high profit margins, which necessitates short-term 

business focus. As one observer has said, ‘‘Being a cash cow is a 

strategy.’’ Not only do we see lower-quality news, but we see companies unwilling to serve customers in whom advertisers have no 

interest. 

The FCC is in a position to keep this situation from worsening. 

Newspaper companies are already reducing competition in communities across the country by what they call clustering, buying newspapers in adjoining markets, cutting their costs, and doing away 

with previously independent voices and newsrooms. 

The companies that own newspapers, and often own other media, 

of course, do not need our assistance to further increase the returns 

to their mostly institutional investors while reducing the number 

of newsrooms and newsgatherers in any given town, yet this is precisely what happens with greater consolidation. 

I want to say a word here about this ‘‘gift of synergy’’ that we 

will supposedly derive from the so-called ‘‘convergence of media.’’ 

Convergence is, indeed, likely to be good for media business, but 

it is almost sure to be bad for journalism. Far from increasing the 

amount or quality of the news-gathering, convergence provides additional means of distribution. There is nothing wrong with that, 

per se; but consider, you have block of reporting by Reporter A, 

who spends a given amount of time producing that reporting and 

a given amount of time putting it together for his newspaper. Now 

his employer asks him to disseminate the same report on the radio, 

on the Internet, and on television. How much time does each new 

method of dissemination require from him? Even if it’s only half an 

hour, that’s an hour and a half that Reporter A could have used 

before for reporting. And if you think companies will increase the 

staff to compensate for this loss in reporting time, I have many a 

story to tell you. The temptation to drop these savings to the bottom line is simply too great. 

My view is that diversity of ownership is important. We have 

fine newspapers from privately owned companies and fine newspapers from publicly held companies, and bad newspapers from 

both. But there is a long-term trend toward disinvestment in journalism that needs addressing in every possible way, and really affects the civic health of this country. 

I welcome all models of ownership, from the few independently 

family owned papers remaining to institutional ownership, such as 

the St. Petersburg Times enjoys, to nonprofit media, such as NPR, 

to foundation-supported investigative reporting, like the Center for 

Public Integrity, which is conducting the kind of reporting that too 

few media are willing to invest money in anymore. 

I believe that a wide range of media will serve the public best, 

and I welcome the democratization we see with proliferation of outlets, particularly on the Web. But we should be under no illusion 

about what media, by and large, are producing substantial, responsible, thorough, digging, edited news reports. It is newspapers. 

Every time they are combined with a local television station, there 

is at least one less TV reporter who might actually spy a story the 

profit-pressured newsroom did not. That means fewer nutrients 

into the local media diet. 

16 

And when the newspaper and the broadcast outlets and the Web 

all join into one report, what values are likely to prevail? As Robert 

Haiman of the Poynter Institute has put it, ‘‘There’s going to be a 

tremendous clash of values: the journalism values of newspapers, 

the entertainment values of television, and the no holds barred, 

raw, unedited, anarchic values of the Internet.’’ Let’s guess how 

likely it is that those stodgy old values of journalism will win on 

this terrain. 

I leave you with this thought. We have plenty of media today. 

We have an ever-declining supply of journalism. I ask you to keep 

that distinction in mind in the decisions before you. 

Thank you. 

[The prepared statement of Professor Overholser follows:] 

PREPARED STATEMENT OF GENEVA OVERHOLSER, CURTIS B. HURLEY CHAIR IN

PUBLIC AFFAIRS REPORTING, MISSOURI SCHOOL OF JOURNALISM, WASHINGTON, 

D.C. BUREAU

Good morning, and thank you for this opportunity. It is an honor to be with you. 

I would like to make one primary point: The story of media in our country today 

is very much like the story of the American diet: We have more different kinds of 

food than ever, more widely available. Yet many Americans are failing to get adequate nutrients, even as we grow ever fatter. We are overfed, but we are undernourished. 

The same is true of media. There are ever more numerous ways to get information, but that is a very different thing from having an improved media diet. We are 

bombarded with information, but we are starving for journalism. It is journalism 

I hope this committee will concern itself with: the original production of content 

serving the public interest. This is expensive to produce, and it is produced only by 

owners who believe it worth investing in. Those owners are in decreasing supply. 

They are disappearing in large part because media company owners find themselves compelled to return profits few other industries can dream of. As longtime 

editor Harold Evans has put it, media companies are not having trouble staying in 

business. They are having trouble staying in journalism. The FCC has it in its 

hands to make matters worse by enabling media owners to take their companies 

still further from the concerns and needs of local citizens. 

I doubt that I need to prove to this of all groups that the presence of greater numbers of media outlets has not ensured improved media performance. Certainly the 

public thinks it has not. A new Gallup Poll found media credibility at its lowest 

point in decades. Fifty-five percent of respondents said they have either ‘‘not very 

much’’ confidence or ‘‘none at all’’ in the media’s fairness and accuracy. 

Nor do my colleagues in the academy report improved media performance. Again 

and again they find that straight news content has given way to celebrity and crime 

news. Stories with public-policy content decrease; conflict and sensation take their 

place. These trends hold across all media, in no small part because the new kinds 

of stories are far cheaper to produce. Now that the business of media is increasingly 

business, rather than news, cuts in newsgathering staff have become the norm—especially in television and radio and newsmagazines, but also in newspapers. There 

is a burgeoning of media outlets, but a constricting of journalism: As the report on 

the State of the News Media 2004 put it: ‘‘Much of the new investment in journalism today—much of the information revolution generally—is in disseminating 

the news, not in collecting it.’’ 

I am here to speak specifically about newspapers, whose decline in importance is 

greatly overstated. Newspapers continue to be important, first, in numbers of readers. On any given Super Bowl Sunday, more Americans read their Sunday paper 

than watch the game. I hear little talk of football’s demise. Newspapers continue 

to be important, too, in the influential role they play in citizens’ lives. A Consumers 

Union study this year found that Americans rely on newspapers much more than 

other media for local news and information. Finally, newspapers influence other 

media to a substantial degree because of the size of their newsgathering resources. 

Yet newspapers are undergoing great strains due to the pressure of maintaining 

high profit margins, which necessitate short-term business focus. As one observer 

has said, being a cash cow IS a strategy. Not only do we see lower-quality news, 

but we see companies unwilling to serve customers in whom advertisers have no inVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00020 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\81581.TXT JACKIE
17 

terest. The FCC is in a position to keep this situation from worsening. Newspaper 

companies are already reducing competition in communities across the country by 

what they call ‘‘clustering’’—buying newspapers in adjoining markets, cutting their 

costs and doing away with previously independent voices—and newsrooms. The 

companies that own newspapers (and often other media, of course) do not need our 

assistance to further increase the returns to their mostly institutional investors 

while reducing the number of newsrooms and newsgatherers in any given town. Yet 

this is precisely what happens with greater consolidation. 

Let me say a word here about this gift of synergy that we will supposedly derive 

from so-called ‘‘convergence’’ of media. Convergence is indeed likely to be good for 

media business, but it is almost sure to be bad for journalism. Far from increasing 

the amount or quality of the newsgathering, convergence provides additional means 

of distribution. There is nothing wrong with that per se. But consider: You have a 

bloc of reporting by reporter A, who spends a given amount of time producing that 

reporting and a given amount of time putting it together for his newspaper. Now 

his employer asks him to disseminate the same report on the radio, on the Internet 

and on television. How much time does each new method of delivery require from 

him? Even if it’s only half an hour, that’s an hour and a half less time each day 

spent on reporting. And if you think companies will increase the staff to compensate 

for this loss in reporting time, I have many a story to share with you. The temptation to drop these savings to the bottom line is simply too great. 

My view is that diversity of ownership is important. We have fine newspapers 

from privately owned companies and fine newspapers from publicly held companies—and bad newspapers from both as well. But there is a long-term trend toward 

disinvestment in journalism that needs addressing in every possible way. I welcome 

all models of ownership, from the few independent family owned papers remaining 

to institutional ownership such as the St. Petersburg Times enjoys, to nonprofit 

media such as NPR to foundation-supported investigative reporting like the Center 

for Public Integrity. 

I believe that a wide range of media will serve the public best, and I welcome 

the democratization we see with the proliferation of outlets on the Web. But we 

should be under no illusion about what media, by and large, are producing substantial, responsible, thorough, digging, edited news reports: Newspapers. Every time 

they are combined with a local television station, there is at the least one less TV 

reporter who might actually spy a story the profit-pressured newsroom did not. That 

means fewer nutrients into the local media diet. And when the newspaper and the 

broadcast outlets and the Web all join into one report, what values are likely to prevail? As Robert Haiman of the Poynter Institute put it, ‘‘There is going to be a tremendous clash of values—the journalism values of newspapers, the entertainment 

values of television and the no-holds-barred, raw, unedited, anarchic values of the 

Internet.’’ Let’s guess how likely it is that the values of journalism will win. 

I leave you with this thought: We have plenty of media today. We have an everdeclining supply of journalism. I ask you to keep that distinction in mind in the decisions before you. 

Thank you. 

The CHAIRMAN. Thank you very much. 

Mr. Thierer? 

STATEMENT OF ADAM D. THIERER, DIRECTOR, 

TELECOMMUNICATIONS STUDIES, CATO INSTITUTE 

Mr. THIERER. Good morning. And thank you, Mr. Chairman, for 

your invitation to testify here this morning on the important issue 

of media ownership regulation. 

This hearing is especially timely for me, since I have a new book 

on this issue due out early next year entitled, Media Myths: Making Sense of the Debate Over Media Ownership. 

I chose that title because I have come to the conclusion, after 

studying this issue, that the debate over media ownership is really 

being driven more by a mythology than anything close to reality. 

That is, while critics of media liberalization have had a great deal 

of success employing very heated rhetoric and extremely emotional 

rationales for mass media regulation, claims about the lack of diVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00021 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\81581.TXT JACKIE
18 

versity or the end of localism and the supposed death of our democracy simply do not square with reality. Indeed, by all impartial 

measures, citizens are better off than they ever have been before 

in this country. Regardless of what the underlying business structures or ownership patterns look like, the real question in this debate must always be this: ‘‘Do citizens have more news, information, and entertainment choices at their disposal today than in the 

past? The answer to that question, I believe, is unambiguously yes. 

There are seven leading myths about modern media I’d like to 

quickly summarize for you here today that my research has unearthed. 

First, and probably the most commonly repeated myth, is that diversity is disappearing in media. The reality, I argue, however, 

could not be more different. Today’s media environment is more diverse than ever before and is characterized by information abundance, not information scarcity. To the extent there is a media diversity problem today, it is that citizens suffer from what you 

might call information overload. The number of media options has 

become so overwhelming that most of us struggle to manage all of 

the information choices at our disposal on a given day. Consider 

that in 1979 most households had only six or fewer local television 

stations to choose from, but today they have an average of seven 

over-the-air broadcast television networks and an average of 102 

cable or satellite options to choose from. Also, the number of radio 

stations in America since 1970 has roughly doubled, from around 

6,700 to almost 13,500 today. And there are more magazines and 

periodicals and weekly being produced now than in any time in our 

nation’s history. 

A second common myth is that localism in media is disappearing. 

The truth is, while we not know exactly how much local fare citizens demand, citizens still receive a wealth of information about 

developments in their local communities. That is, although citizens 

are increasingly opting for more sources of national news and entertainment, local information and programming are still quite popular and certainly will not disappear in a deregulated media marketplace. 

The third myth concerns concentration and the mistaken belief 

that only a few companies control the entire media universe. Contrary to this widely circulated myth, the media marketplace is vigorously competitive and not significantly more concentrated than in 

past decades. A McKinsey & Company analyst recently noted that, 

quote, ‘‘There are more than a hundred media companies worldwide, and entertainment media are still fragmented compared with 

other industries.’’ And an FCC survey of various media markets 

across America from 1960 to 2000 also showed that, quote, ‘‘Collectively, the number of media outlets and owners increased tremendously over that 40 year period with an average of a 200 percent 

increase in the number of outlets and 140 percent increase in the 

number of owners.’’ And media expert Eli Noam, of Columbia University, has nicely summarized what we must always understand, 

that bigness in media is a relative term, when he says, quote, 

‘‘While the fish in the media pond have grown in size, the pond did 

grow, too, and there have been new fish and new ponds.’’ 

19 

The fourth myth involves assertions about the future of democracy somehow being at risk in this debate, and I won’t spend a lot 

of time on this, even though I do in my book. But these arguments 

strike me as quite preposterous, since the increased media availability and communications connectivity we have seen in America 

in recent years and decades has given us the ability to learn more 

about our democracy, and debate more on our democracy, than ever 

before. 

A fifth myth is that regulation is needed to preserve high quality 

journalism and entertainment. I find these arguments very troubling since, at root, media quality is fundamentally a subjective 

matter. Government should have no say over, or even attempt to 

influence, the quality of news or information or entertainment in 

America. The good news, however, is that, with so many media outlets available today, citizens have a wider range of options from 

which to choose, meaning they can decide for themselves what level 

of quality they desire—soft news, hard news, or whatever else. 

A sixth myth is that the First Amendment somehow justifies extensive media-ownership controls, or can be used as a regulatory 

tool to mandate access to media outlets. This is, without doubt, in 

my opinion, the most dangerous of all the media myths. In reality, 

the First Amendment was written, not as a constraint on private 

speech or actions, but, rather, as a direct restraint on government 

actions as they relate to speech. If the First Amendment is to retain its force as the bulwark against government control of the 

press, it cannot be used to justify ownership rules or media access 

mandates. 

A seventh and final myth is that new technologies or media outlets, including the Internet, have little bearing on this debate. To 

the contrary, new technologies and outlets do have an important 

relationship to this debate and call into question the wisdom of the 

existing media ownership restrictions. In particular, the rise of the 

Internet and the World Wide Web is radically changing the nature 

of modern media in America. Anyone who thinks differently might 

want to ask Dan Rather this week what he thinks about the impact of new technologies on traditional media. 

With 72 percent of Americans now online and spending an average of 9 hours weekly on the Internet, surfing through the roughly 

170 terabytes of information available online, which is 17 times the 

size of the Library of Congress print collections, I do not see how 

anyone can seriously argue that the Internet is not fundamentally 

transforming our media universe. More generally, my research has 

found that all media compete, in the very broad sense of the term, 

and that citizens frequently substitute one type of media for another. What else explains cable and satellite companies stealing so 

much audience share from traditional broadcasters, or satellite 

radio networks quickly eating in traditional radio’s market share, 

or the fact that millions of Americans now purchase or receive 

daily additions of national newspapers, such as the USA Today or 

the Wall Street Journal and the New York Times? This is, I believe, 

a healthy, competitive market at work, a market in which citizens 

exercise their right to be as finicky as they want in substituting 

one media option or outlet for another. 

20 

1Federal Communications Commission, In the Matter of 2002 Biennial Regulatory Review— 

Review of the Commission’s Broadcast Ownership Rules and Other Rules Adopted Pursuant to 

In conclusion, our media world has changed, and changed in almost every way, for the better. To the extent there ever was a, 

quote, ‘‘golden age of American media,’’ I believe we are living in 

it today. There has never been a time in our nation’s history when 

citizens have had access to more media outlets, more news, more 

information, or more entertainment. This conclusion is supported 

by a solid factual record, which I have provided—much of which— 

in the appendix to my testimony. 

In such an age of media abundance, the question of who owns 

what, or how much they own of anything else, is irrelevant. No 

matter how large any given media outlet is today, it is ultimately 

just one of many fish in a large and growing media pond. Indeed, 

as the FCC concluded when revising these rules, quote, ‘‘The question confronting media companies today is not whether they will be 

able to dominate the distribution of news and information in any 

market, but whether they will be able to be heard at all among the 

cacophony of voices vying for the attention of Americans,’’ end 

quote. I completely agree with the FCC. The media world has 

changed, and so must the rules that govern it. 

Thank you for inviting me here today, Mr. Chairman, and I’m 

happy to discuss questions in the Q&A period. 

[The prepared statement of Mr. Thierer follows:] 

PREPARED STATEMENT OF ADAM D. THIERER, DIRECTOR, TELECOMMUNICATIONS

STUDIES, CATO INSTITUTE

Good morning, my name is Adam Thierer and I serve as Director of Telecommunications Studies at the Cato Institute. Thank you, Mr. Chairman, for your invitation 

to testify here this morning on the important issue of media ownership regulation. 

This hearing is especially timely for me since I have a new book on this issue due 

out early next year entitled, Media Myths: Making Sense of the Debate over Media 

Ownership. 

I chose that title because I have come to the conclusion that the debate over 

media ownership is being driven more by myth than reality. That is, while critics 

of media liberalization have had great success employing heated rhetoric and extremely emotional rationales for media regulation, claims about a lack of ‘‘diversity,’’ 

the end of ‘‘localism,’’ or the supposed ‘‘death of democracy’’ simply do not square 

with reality. 

Objective facts reveal that such rhetoric and claims are baseless. Indeed, by all 

impartial measures, citizens are better off today than they have ever been before. 

Regardless of what the underlying business structures or ownership patterns look 

like, the real question in this debate must be this: ‘‘Do citizens have more news, information, and entertainment choices at their disposal today than in the past?’’ The 

answer to that question is unambiguously ‘‘yes.’’ 

There are 7 leading myths about modern media. I’ll quickly summarize each one 

for you. 

Debunking the Media Myths 

The first, and probably most commonly repeated myth, is that diversity will disappear absent extensive government regulation of the media. The reality, however, 

could not be more different. Today’s media environment is more diverse than ever 

before and is characterized by information abundance, not scarcity. Citizens enjoy 

more news and entertainment options than at any other point in history. To the extent there is a media diversity problem today, it is that citizens suffer from ‘‘information overload.’’ The number of media options has become so overwhelming that 

most of us struggle to manage all the information at our disposal. Consider that in 

1979 most households had 6 or fewer local television stations to choose from, but 

today the average U.S. household receives 7 broadcast television networks and an 

average of 102 cable or satellite channels per home.1 Also, the number of radio staVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00024 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\81581.TXT JACKIE
21 

Section 202 of the Telecommunications Act of 1996, FCC 03–127, June 2, 2003, p. 15, http:// 

hraunfoss.fcc.gov/edocslpublic/attachmatch/FCC-03-127A1.pdf, cited hereafter as FCC, Media 

Ownership Proceeding. 2The Magazine Handbook 2004–5, (New York, NY: Magazine Publishers of America, 2004), 

p. 5, http://www.magazine.org/content/Files/MPA%5Fhandbook%5F04.pdf. 3Michael J. Wolf, ‘‘Here Comes Another Wave of Media Mergers,’’ The Wall Street Journal, 

February 21, 2002. 4Scott Roberts, Jane Frenette and Dione Stearns, ‘‘A Comparison of Media Outlets and Owners for Ten Selected Markets: 1960, 1980, 2000,’’ Federal Communications Commission, Media 

Ownership Working Group Study no. 1, September 2002, p. 2, http://hraunfoss.fcc.gov/ 

edocslpublic/attachmatch/DOC-226838A2.pdf. 5 Eli M. Noam, ‘‘Media Concentration Trends in America: Just the Facts,’’ In the Matter of 

2002 Biennial Regulatory Review—Review of the Commission’s Broadcast Ownership Rules and 

Other Rules Adopted Pursuant to Section 202 of the Telecommunications Act of 1996, January 

2, 2003, p. 2, http://www.citi.columbia.edu/research/readings/mediaconcentration.pdf. 

tions in America has roughly doubled from about 6,700 in 1970 to almost 13,500 

today. And there are more magazines and periodicals being produced now than at 

any time in our nation’s history. In 2003, there were 17,254 magazines produced 

up from 14,302 in 1993.2

A second common myth is that ‘‘localism’’ in media is disappearing. The truth is, 

while we do not really know exactly how much local fare citizens demand, citizens 

still receive a wealth of information about developments in their communities. That 

is, although citizens are increasingly opting for more sources of national news and 

entertainment, local information and programming are still popular and will not 

disappear in a deregulated media marketplace. 

The third myth concerns concentration and the mistaken belief that only a few 

companies control the entire media universe. Contrary to this widely circulated 

myth, the media marketplace is vigorously competitive and not significantly more 

concentrated than in past decades. A McKinsey & Company analyst recently noted 

that ‘‘There are more than 100 media companies worldwide. . .and entertainment 

and media are still fragmented compared with other industries such as pharmaceuticals and aerospace.’’ 3 An FCC survey of various media markets across America 

from 1960 to 2000 also showed that, ‘‘Collectively, the number of media outlets and 

owners increased tremendously over the 40-year period,’’ with an average of a 200 

percent increase in the number of outlets and a 140 percent increase in the number 

of owners.4 Media expert Eli Noam of Columbia University has nicely summarized 

why we must understand that ‘‘bigness’’ is a relative term in media: ‘‘[W]hile the 

fish in the pond have grown in size, the pond did grow too, and there have been 

new fish and new ponds.’’ 5 But, in any event, competition and concentration are not 

mutually exclusive. Citizens can have more choices even as the ownership grows 

slightly more concentrated as it has in some sectors in recent years. 

The fourth myth involves assertions about the future of our democracy somehow 

being at risk. These arguments strike me as quite preposterous since increased 

media availability and communications connectivity have given Americans the ability to learn and debate more about our democracy than ever before. More importantly, civil discourse and a healthy democracy are the product of a free and open 

society unconstrained by government restrictions on media structures or content. If 

government can simply ordain any ownership structures or business arrangements 

it wishes in the name of serving ‘‘democracy,’’ then it raises serious censorship concerns. 

A fifth myth is that regulation is needed to preserve high quality journalism and 

entertainment. I find these arguments very troubling since, at root, media quality 

is a subjective matter. Government should have no say over, or even attempt to influence the quality of news or entertainment in America. The good news, however, is 

that with so many media outlets available today, citizens have a wide range of options from which to choose, meaning they can decide for themselves what level of 

‘‘quality’’ they desire. 

A sixth myth is that the First Amendment justifies extensive media ownership 

controls, or can be used as a regulatory tool to mandate access to media outlets. 

This is, without doubt, the most dangerous of all the media myths. In reality, the 

First Amendment was not written as a constraint on private speech or actions, but 

rather as a direct restraint on government actions as they relate to speech. If the 

First Amendment is to retain its force as a bulwark against government control of 

the press, it cannot be used to justify ownership rules or ‘‘media access’’ mandates. 

A seventh and final myth is that new technologies or media outlets, including the 

Internet, have little bearing on this debate or cannot be used as justification for relaxing existing media ownership rules at all. To the contrary, new technologies and 

outlets do have an important relationship to this debate and call into question the 

22 

6FCC, Media Ownership Proceeding, p. 148. 7Peter Lyman and Hal R. Varian, How Much Information? 2003, School of Information Management and Systems, University of California at Berkeley, 2003, http://www.sims 

.berkeley.edu/research/projects/how-much-info-2003/printablelreport.pdf. 8Federal Communications Commission, Tenth Annual Video Competition Report, January 5, 

2004, p. 115, http://hraunfoss.fcc.gov/edocslpublic/attachmatch/FCC–04–5A1.pdf, cited hereafter as FCC, Video Competition Report. 9 Robert J. Samuelson, ‘‘Bull Market for Media Bias,’’ The Washington Post, June 23, 2004, 

p. A21. 10FCC, Media Ownership Proceeding, p. 149. 

wisdom of existing media ownership restrictions. In particular, the rise of the Internet and the World Wide Web is radically changing the nature of modern media. 

(Anyone who thinks differently might want to ask Dan Rather what he thinks about 

the impact of new technologies on traditional media!) With 72 percent of Americans 

now online and spending an average of nine hours weekly on the Internet 6 surfing 

through the 170 terabytes of information available online—which is seventeen times 

the size of the Library of Congress print collections 7—I do not see how anyone can 

seriously argue that the Internet is not fundamentally transforming our media universe. 

More generally, my research finds that all media compete in a broad sense and 

that citizens frequently substitute one type of media for another. What else explains 

cable stations stealing so much audience share from traditional broadcasters, or that 

88 percent of Americans now subscribe to cable and satellite TV even though ‘‘free, 

over-the-air’’ television remains at their disposal? 8 What else explains how satellite 

radio, an industry that did not even exist prior to December 2001, today boasts over 

2 million subscribers and is rapidly eating into traditional radio’s market share? Or 

the fact that millions of Americans purchase daily editions of national newspapers 

such as the USA Today, The Wall Street Journal and The New York Times? In fact, 

49 percent of The New York Times’ daily circulation is now outside the New York 

area and it offers home delivery in 275 markets.9 Such statistics reveal a healthy, 

competitive market at work; a market in which citizens exercise their right to be 

as finicky as they want in substituting one media option or outlet for another. 

Conclusion 

Our media world has changed, and changed in almost every way for the better. 

To the extent there was ever a ‘‘Golden Age’’ of American media, we are living in 

it today. There has never been a time in our Nation’s history when citizens had access to more media outlets, more news and information, or more entertainment. 

This conclusion is supported by a solid factual record. Advocates of media regulation, by contrast, continue to base their case for government regulation on emotional 

appeals and baseless ‘‘Chicken Little’’ doomsday scenarios. 

In such an age of abundance, the question of who owns what, or how much they 

own, is irrelevant. No matter how large any given media outlet is today, it is ultimately just one of hundreds of sources of news, information and entertainment that 

we have at our disposal. ‘‘Indeed,’’ as the FCC concluded when revising these rules, 

‘‘the question confronting media companies today is not whether they will be able 

to dominate the distribution of news and information in any market, but whether 

they will be able to be heard at all among the cacophony of voices vying for the attention of Americans.’’ 10

I completely agree with the FCC. The media world has changed and so must the 

rules that govern it. Thank you for inviting me here today to discuss the facts about 

media in America. 

23 

Table 2.—Media Outlet Ownership in Select Markets 

[Comparison of Media Outlets and Owners for 10 Selected Media Markets (1960–2000)] 

Market 

Rank City 

1960 1980 2000 % Change 1960–2000 

Outlets Owners Outlets Owners Outlets Owners Outlets Owners 

# 1 New York, NY 89 60 154 116 184 114 107% 90% 

# 29 Kansas City, MO 22 16 44 33 53 33 141% 106% 

# 57 Birmingham, AL 28 20 44 34 59 38 111% 90% 

# 85 Little Rock, AR 17 14 35 30 60 33 253% 136% 

# 113 Lancaster, PA 14 10 21 16 25 20 79% 100% 

# 141 Burlington, VT/Plattsburgh, NY 15 13 37 28 53 34 253% 162% 

# 169 Myrtle Beach, SC 6 6 22 16 38 23 533% 283% 

# 197 Terre Haute, IN 12 8 26 19 33 22 175% 175% 

#225 Charlottesville, VA 8 5 13 10 23 14 188% 180% 

# 253 Altoona, PA 11 9 19 12 23 15 109% 67% 

195% 139% 

Source: Federal Communications Commission, Media Ownership Working Group, September 2002. 


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TABLE 3.—S-CURVES FOR VARIOUS TECHNOLOGIES

Table 4.—The Relentless March of Technology 

1970 1980 1990 2002–4 

Percentage of households with TVs 95.3% 97.9% 98.2% 98.2% 

Total number of broadcast Television Stations 875 NA 1,470 1,744 

Average number of TV sets per household 1.4 1.7 2.1 2.4 

Average daily time spent viewing TV (hours & minutes) 5:56 6:36 6:53 7:44 

Percentage of households with Radios 98.6% 99% 99% 99% 

Total number of broadcast Radio Stations 6,751 NA 10,819 13,476 

Percentage of households with VCRs 0 1.1% 63% 87% 

Percentage of households with DVD players 0 0 0 50% 

Percentage of households with Cell Phones 0 0 5% 70% 

Total number of cell phones subscribers 0 NA 5.2 

Million 

158.7 

Million 

Cell phone average monthly bill NA NA $80.90 $49.91 

Percentage of homes subscribing to Cable Television 6.7% 19.9% 56.4% 68% 

Percentage of total households to which cable television is 

available NA 42% 93% 95% 

Estimated TV market share of ‘‘Big 3’’ (ABC, CBS, NBC) 55% 49% 31% 21% 

Estimated TV market share of Basic Cable 1% 3% 20% 35% 

Percentage of homes subscribing to Direct Broadcast Satellite 

(DBS) TV 0 0 1% 24% 

Percentage of homes with a Personal Computer 0 0 22% 66% 

Percentage of homes with Internet Access 0 0 0 74.9% 

Sources: Consumer Electronics Association, eBrain Market Research; Cellular Telecommunications and Internet Association; Statis- tical Abstract of the United States, 2003; Federal Communications Commission; Nielsen Media Research 


928THE2.eps
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Table 5.—Media Trends of Yesterday and Today 

circa 1970 today 

Extremely high barriers to entry Much lower entry barriers thanks to explosion of new 

technologies and media outlets 

High distribution costs Lower costs of distribution relative to past 

Primary business strategy = One-to-many; 

broadcasting; focus on appeasing mass audiences; 

less media specialization 

Primary business strategy = One-to-one; narrowcasting; focus on appeasing niche or splintered 

audiences; hyper-specialization of media 

Distinct media sectors with own sphere of influence Greater competition/substitution among media 

sources and outlets 

Limited media outlets; limited overall choices Explosion of both sheer number of media outlets and 

overall range of choices 

People complained about ‘‘information scarcity’’ People complain of ‘‘information overload’’ 

‘‘Big 3’’ dominated television and control 90 percent of 

audience 

7 broadcast TV networks and a 500-channel universe 

of cable and satellite choices 

3 nightly national newscasts shown once per evening Dozens of national newscasts shown on a 24–7 basis, 

including foreign languages 

We had to go to the library to retrieve hard-to-find 

information 

The library comes to us via the Internet and online 

services 

Limited number of electronic communications or 

information devices in the home (phone, TV, radio) 

In addition to many phones, TVs and radios, each 

home today usually has at least a few of the following: CDs, DVDs, VCRs, computers, Internet access, interactive software, cell phones and other mobile communications devices, etc. 

3 minute coast-to-coast long distance call cost $1.35 3 minute coast-to-coast long distance call cost roughly 

15 cents 

Table 6.—The Expanding Video Programming Marketplace On Cable and Satellite TV 

News: CNN, Fox News, MSNBC, C-Span, C-Span 2, C-Span 3, BBC America 

Sports: ESPN, ESPN News, Fox Sports, TNT, NBA TV, NFL Network, Golf Channel, Speed Channel, 

Outdoor Life Network 

Weather: The Weather Channel 

Home Renovation: Home & Garden Television, The Learning Channel, DIY 

Educational: The History Channel, The Biography Channel (A&E), The Learning Channel, Discovery 

Channel, National Geographic Channel, Animal Planet 

Travel: The Travel Channel, National Geographic Channel 

Financial: CNNfn, CNBC, Bloomberg Television 

Shopping: The Shopping Channel, Home Shopping Network, QVC 

Female-oriented: WE, Oxygen, Lifetime 

Male-oriented: Spike TV 

Family/Children-oriented: Nickelodeon, Disney Channel, Cartoon Network, WAM (movie channel 

for 8–16 year olds), Noggin (2–5 years)/The N Channel (9–14 years), PBS Kids, Hallmark Channel, 

Discovery Kids, Animal Planet, ABC Family, Boomerang, The Family Channel (FAM), HBO Family 

African-American: BET, Black Starz! 

Foreign/Foreign Language: Telemundo (Spanish), Univision (Spanish), Deutsche Welle (German), 

BBC America (British), TV Asia, ZEE–TV Asia (South Asia) ART: Arab Radio and Television, The 

Filipino Channel (Philippines), Saigon Broadcasting Network (Vietnam), The International 

Channel, HBO Latino 

Religious: Trinity Broadcasting Network, The Church Channel (TBN), World Harvest Television, 

Eternal Word Television Network 

Music: MTV, MTV 2, VH1, VH1 Classic, Fuse, Country Music Television, Great American Country, 

Gospel Music Television Network 

Movies: HBO, Showtime, Cinemax, Starz, Encore, The Movie Channel, Turner Classic Movies, AMC, 

IFC, Sundance, Bravo, (Action, Westerns, Mystery, Love Stories, etc . . .), Flix, 

Other or General Interest Programming: TBS, USA Network, TNT, SciFi Channel 

26 

Table 7.—2003 New Magazine Launches by Interest Category 

Crafts/Games/Hobbies/Models (45) Computers (10) Teen (6) 

Metro/Regional/State (45) Women’s (10) TV/Radio/Communications/ 

Electronics (6) 

Sports (33) Men’s (10) Art/Antiques (5) 

Automotive (29) Children’s (8) Business/Finance (5) 

Special Interest (23) Comics/Comic Technique (8) Motorcycles (5) 

Health (19) Entertainment/Performing Arts (7) Bridal (3) 

Home Service/Home (17) Literary Reviews/Writing (7) Aviation (2) 

Music (15) Photography (7) Gaming (2) 

Sex (13) Pop Culture (7) Gardening (2) 

Ethnic (11) Religious/Denominational (7) Military/Naval (2) 

Epicurean (11) Dogs/Pets (6) Science/Technology (2) 

Fashion/Beauty/Grooming (11) Dressmaking/Needlework (6) Media Personalities (1) 

Fitness (11) Fishing/Hunting (6) Mystery/Science Fiction (1) 

Travel (11) Political/Social Topics (6) 

TOTAL: 440 

TABLE 8.—A CLEAR CHANNEL RADIO MONOPOLY? 


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Table 9.—Internet Radio Stations 

LaunchCast (radio.yahoo.com) 

Rhapsody (www.listen.com) 

Live 365 (www.live365.com) 

Net Radio.com (www.netradio.com) 

eoRadio (www.eoradio.com) 

Totally Radio (www.totallyradio.com) 

Soul Patrol (http://www.soul-patrol.net) 

SnakeNet Metal Radio (www.snakenetmetalradio.com) 

Recovery Net (www.recoverynetradio.com) 

Beethoven.com (www.beethoven.com) 

Web-Radio (www.web-radio.fm) 

Radio@Netscape (www.spinner.com) 

NPR Online (www.npr.org) 

VH1’s SonicNet.com (http://www.sonicnet.com/) 

TABLE 10.—DO THE ‘‘BIG 3’’ OWN EVERYTHING? 


928THE4.eps
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11 Richard Saul Wurman, Information Anxiety (New York: Doubleday, 1989), p. 32. Likewise, 

William Van Winkle of Computer Bits magazine argues that, ‘‘A Sunday edition of the New York 

Times carries more information than the average 19th-century citizen accessed in his entire 

life.’’ William Van Winkle, ‘‘Information Overload,’’ Computer Bits, February 1998, http:// 

www.computerbits.com/archive/1998/0200/infoload.html. 12Susan Hubbard, in Carol Collier Kuhlthau, ed., Information Skills for an Information Society: A Review of Research (Syracuse, NY: ERIC Clearinghouse on Information Resources, December 1987). 13 Bagdikian, p. 29. 14Scott Roberts, Jane Frenette and Dione Stearns, ‘‘A Comparison of Media Outlets and Owners for Ten Selected Markets: 1960, 1980, 2000,’’ Federal Communications Commission, Media 

Ownership Working Group Study no. 1, September 2002, p. 2, http://hraunfoss.fcc.gov/ 

edocslpublic/attachmatch/DOC–226838A2.pdf. 15 Joe Mandese, ‘‘Study: Media Overload on the Rise,’’ Television Week, May 17, 2004, http:// 

www.tvweek.com/planning/051704study.html. 

TABLE 11.—CABLE RATINGS SHARE NOW TOPS BROADCASTERS

TABLE 12.—AN ASSORTMENT OF MEDIA FUN FACTS

General Media Facts or Trends: 

• ‘‘A weekday edition of the New York Times contains more information than the 

average person was likely to come across in a lifetime in seventeenth-century 

England.’’ 11 A 1987 report estimated that more new information has been produced within the last 30 years than in the last 5000.12

• According to Ben Bagdikian, there are 37,000 different media outlets in America. That number jumps to 54,000 if all weeklies, semiweeklies, advertising 

weeklies and all periodicals are included, and to 178,000 if all ‘‘information industries’’ are included. And yet Bagdikian is a leading critic of media deregulation and the title of his most recent book is The New Media Monopoly! 13

• An FCC survey of large and small media markets across America from 1960 to 

2000 revealed that, ‘‘Collectively, the number of media outlets and owners increased tremendously over the 40-year period,’’ with an average of a 200 percent 

increase in the number of outlets and a 140 percent increase in the number of 

owners.14

• By 2007, the average American will spend 3,874 hours per year using major 

consumer media, an increase of 792 hours per year from the 3,082 hours per 

year that the average person spent using consumer media in 1977.15


928THE5.eps
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16 Various sources. 17Plunkett’s Entertainment & Media Industry Almanac 2002–2003 (Houston: Plunkett Research Ltd., 2002), p. 7. 18 Noted in Christina Wise, ‘‘The Good Ol’ Days Are Now: Cox,’’ Investor’s Business Daily, 

April 19, 2004, p. A22. 19Federal Communications Commission, Tenth Annual Video Competition Report, January 5, 

2004, p. 115, http://hraunfoss.fcc.gov/edocslpublic/attachmatch/FCC–04–5A1.pdf, cited hereafter as FCC, Video Competition Report. 20FCC, Media Ownership Proceeding, p. 15. ‘‘Non-broadcast television programming continues 

to proliferate. Today, there are more than 308 satellite-delivered national non-broadcast television networks available for carriage over cable, DBS and other multichannel video program 

distribution (‘‘MVPD’’) systems. In 2002, the Commission also identified at least 86 regional nonbroadcast networks, including 31 sports channels, and 32 regional and local news networks. We 

are moving to a system served by literally hundreds of networks serving all conceivable interests. Programming in particular abundance are sports, entertainment, and informational in nature. The four largest broadcast networks own both broadcast and cable channels. Their share 

of viewership is far greater than their share of the channels received by the typical American 

household. Of the 102 channels received by the average viewing home, the four largest broadcast 

networks have an ownership interest in approximately 25 percent of those channels.’’ Ibid., pp. 

48–49. 21FCC, Media Ownership Proceeding, p. 48–49. 22 Benjamin M. Compaine, ‘‘The Newspaper Industry,’’ in Benjamin M. Compaine and Douglas 

Gomery, eds., Who Owns the Media? Competition and Concentration in the Mass Media Industry 

(Mahwah, N.J.: Lawrence Erlbaum Associates, 3rd Edition, 2000), p. 7. 23 ‘‘Newspaper,’’ Microsoft Encarta Online Encyclopedia, 2004, http://encarta.msn.com/encyclopedial761564853/Newspaper.html 24The Magazine Handbook 2004–5, (New York, NY: Magazine Publishers of America, 2004), 

p. 5, http://www.magazine.org/content/Files/MPA%5Fhandbook%5F04.pdf. 25 Ibid., p. 7. 26Samir Husni, Samir Husni’s Guide to New Magazines 2004, 19th Edition, http://www 

.shgncm.com/shgncm/. 

• As of 2003, household penetration rates for various new media and communications technologies were very high and growing fast: VCR (88 percent); DVD (50 

percent); DBS (24 percent); cell phones (70 percent); personal computers (66 

percent); Internet access (75 percent). With the exception of VCRs, none of these 

technologies were in American homes in 1980.16

• In 2002, the average consumer spent $212 for basic cable, $100 for books, $110 

for home videos, $71 for music recordings, $58 for daily newspapers, $45 for 

magazines, $45 for online Internet services, and $36 on movies.17

• A three minute coast-to-coast long-distance phone call which cost roughly $1.35 

in 1970 only cost 15 cents in 2003.18

Television/Video Competition: 

• 88 percent of Americans now subscribe to cable and satellite ‘‘pay TV’’ sources 

even though ‘‘free, over-the-air’’ television remains at their disposal.19

• The FCC has found that, ‘‘In 1979, the vast majority of households had six or 

fewer local television stations to choose from, three of which were typically affiliated with a broadcast network. Today the average U.S. household receives 

seven broadcast television networks and an average of 102 channels per 

home.’’ 20

• There are more than 308 satellite-delivered national non-broadcast television 

networks available for carriage over cable, DBS and other systems today. The 

FCC concludes, ‘‘We are moving to a system served by literally hundreds of networks serving all conceivable interests.’’ 21

Newspapers and Magazines: 

• In 1900, the average newspaper had only 8 pages.22 In the year 2000, by contrast, according to the Encarta encyclopedia, ‘‘Daily general-circulation newspapers average[d] about 65 pages during the week and more than 200 pages 

in the weekend edition.’’ 23

• There were 17,254 magazines produced in 2003, up from 14,302 in 1993. ‘‘For 

virtually every human interest, there is a magazine.’’ 24

• There were 440 new magazine launches in 2003, up from 289 new launches in 

2002.25 Another source puts the number much higher at 949 new launches last 

year.26

Radio: 

• The number of radio stations in America has roughly doubled since 1970. As 

of March 2004, there were 13,486 radio stations in America, up from 6,751 in 

January 1970. 

30 

27FCC, Media Ownership Proceeding, p. 148. 28Peter Lyman and Hal R. Varian, How Much Information? 2003, School of Information Management and Systems, University of California at Berkeley, 2003, http://www.sims 

.berkeley.edu/research/projects/how-much-info-2003/printablelreport.pdf. 29Leslie Walker, ‘‘EBay Gathering Puts Highs, Lows On Full Display,’’ The Washington Post, 

July 1, 2004, p. E1, http://www.washingtonpost.com/wp-dyn/articles/A17604–2004Jun30.html. 30 ‘‘Google Achieves Search Milestone With Immediate Access To More Than 6 Billion Items,’’ 

Google Press Release, February 17, 2004, http://www.google.com/press/pressrel/6billion.html. 31 ‘‘Frequently Asked Questions,’’ Internet Archive Wayback Machine, http://www 

.archive.org/about/faqs.php. 

• Satellite radio (XM & Sirius), an industry that did not even exist prior to December 2001, today boasts over 2 million subscribers nationwide according to 

company reports. 

Internet/Online Services: 

• 72 percent of Americans are now online and spend an average of nine hours 

weekly on the Internet.27

• The World Wide Web contains about 170 terabytes of information on its surface; 

in volume this is seventeen times the size of the Library of Congress print collections.28

• Although less than 10 years old, online auction giant E-Bay has grown so massive that it now handles more daily trading traffic than the Nasdaq Stock Market according to CEO Meg Whitman.29

• Online search giant Google recently reported that its collection of 6 billion items 

includes ‘‘4.28 billion web pages, 880 million images, 845 million Usenet messages, and a growing collection of book-related information pages.’’ 30

• The Internet Archive ‘‘Wayback Machine’’ (www.archive.org) offers 30 billion 

web pages archived from 1996 to the present. It contains approximately 1 

petabyte of data and is currently growing at a rate of 20 terabytes per month. 

The site notes, ‘‘This eclipses the amount of text contained in the world’s largest 

libraries, including the Library of Congress. If you tried to place the entire contents of the archive onto floppy disks . . . and laid them end to end, it would 

stretch from New York, past Los Angeles, and halfway to Hawaii.’’ 31

The CHAIRMAN. Thank you very much. 

Professor Overholser, I’ve noticed an interesting thing in reading 

local newspapers which are owned by large chains, that if you scan 

most any part of the first section of the paper, you see a story, the 

headline or the bold print, and underneath you’ll see, in tiny wording, ‘‘New York Times,’’ ‘‘Washington Post,’’ ‘‘Knight Ridder,’’ ‘‘Reuters.’’ Almost totally disappearing is any local or that newspaperowned reporters reporting on national media stories. Do you—can 

you comment on that? 

Professor OVERHOLSER. Absolutely, Senator. I think that what 

you’re observing is cost savings. Now, I do think it’s important that 

local newspapers bring national and international news to a given 

community, and they’re not likely to have their own reporters 

abroad. Alas, it’s all too true that more of that news hole in that 

newspaper is taken up by wire, even to the expense—at the expense of local news, which simply is not being undertaken as much. 

And this phenomenon that you’re observing is true on a larger 

scale for a newspaper like, for example, the Des Moines Register, 

would choose to do extensive agricultural reporting, which was a 

costly undertaking, but it was of national value. They are doing 

very little of it. And that story plays out across the country. 

Now, what you can do about that—I mean, I think we ought to 

have a national commission that looks at the paltry quality of local 

news, because it makes a difference. But that’s, of course, not immediately in your hands, except to the extent that the FCC can 

make that worse by creating still more means of these companies 

31 

saving money, and dropping it to the bottom lines, and not serving 

local needs. 

I mean, I’m amazed to hear my colleague say that this supposed 

‘‘golden age of American media’’ means we have a public that 

knows more about democracy than ever before. I haven’t seen the 

evidence of that. 

The CHAIRMAN. Well, that leads me, Mr. Thierer, to one of your 

statements—in your beginning statement, ‘‘Regardless of what the 

underlying business structure or ownership patterns look like, the 

real question in this debate must be, ‘Do citizens have more information and entertainment choices at their disposal today than in 

the past?’ ’’ Well, you regard—you disregard the fundamental problem. We have media controlled by major corporations in America, 

which leads to the usual media caution, which leads to the usual 

media consolidation, which leads to, as my friend to my right here 

often says, ‘‘many voices and one ventriloquist.’’ And we see that 

time after time in news reporting, including an avoidance of controversial issues. That’s the nature of corporate America, to avoid 

controversy, because they’re only interested in one thing, and that’s 

the bottom line. So I disregard—I disagree with your fundamental 

principle, when you say, Regardless of what the underlying business structure of ownership patterns look like. That, to me, is incredibly and extremely relevant in this discussion and debate. And 

I’ll be glad to hear your response. 

Mr. THIERER. Sure. Basically, I hear a lot of arguments in this 

debate, what I classify—I would classify as, sort of, a neo-conspiratorial puppet-master theory of mass media domination. The idea 

that somehow a handful of guys in New York or L.A. are 

puppeteering all media ideas or outputs or whatever else, I find 

this notion to be absolutely absurd. And even if there was any 

truth to this notion, that somehow a few guys sitting in New York 

or L.A. were controlling all of our thoughts, it’s going to—they’re 

going to be very hard-pressed to do that. They’re going to be hardpressed to control the people under them—the journalists, the editors. And, of course, there are so many other checks on what they 

are doing. All’s it takes is one Drudge Report story to break news 

about—that something is going fishy on—in a major media outlet. 

The CHAIRMAN. Well, perhaps this—obviously, you misconstrued 

my statement, but perhaps we should do a study, for example, of 

the overseas presence of the major networks in America today. It’s 

well known that when CBS was acquired, the then-CEO went all 

over Europe, ‘‘You’re fired, you’re gone, you’re done,’’ no more news 

bureau in Rome, none—reduced it drastically in Moscow, take it 

out in London. This is true of all the networks. When you look at 

the presence of reporting of major television networks and reporters, the bottom line is profit and loss. I’m not talking about controlling media; I’m talking about profit and loss, Mr. Thierer. There’s 

two different things there. 

And so the facts are facts. The facts are that, as compared with 

the 1970s, the reporting of what’s going on in the world has been 

dramatically—I say dramatically—reduced for cost-cutting reasons. 

And we’ll do—we’ll have some study, but, I mean, it’s just a fact. 

And maybe that’s satisfactory to you. Maybe that’s fine with you. 

And I understand Cato’s libertarian views. But I believe that when 

32 

the bottom line is the only, or certainly the overriding, objective of 

any organization, the days of Edward R. Murrow are long, long 

gone. 

Mr. THIERER. Could I make a couple of quick responses—— 

The CHAIRMAN. Sure. 

Mr. THIERER.—very briefly? 

First of all, as you say, the facts are the facts. And the facts are, 

we had far many more embedded reporters in Iraq for this most 

recent conflict than we did during the previous conflict or the Vietnam War or anything else. So regardless of the profitability—— 

The CHAIRMAN. First of all, that’s not true. We had more reporters in Vietnam than we had in Iraq. But we had a new concept, 

and that was embedded reporters; and that was for a conflict. I’m 

not talking about for a conflict. And, by the way, most of those are 

gone now. And I’m not talking about a major conflict, which absorbs the attention of the American people. I’m talking about everyday reporting of events that are going on over the world, and 

that means news bureaus in capitals of countries all over the 

world. They have been dramatically reduced or eliminated. 

Go ahead, please. 

Mr. THIERER. For the major networks, I would agree that is probably the case, because, of course, a lot of their news has been cut 

as they face increased competition from cable and satellite television news sources. Those 24/7—— 

The CHAIRMAN. They’re establishing news bureaus over there? 

Mr. THIERER. Well, they have, certainly, a fair amount of presence across the world. Whether or not they have a bureau in every 

major capital is a different story. Of course, they’re on the move so 

much that they are reporting from a lot of different regions and 

countries. 

The CHAIRMAN. Well, we just have a fundamental difference of 

opinion. And I tell you, mine is shared by almost every objective 

journalist or expert on journalism in America. 

Mr. Compaine, I also find it interesting that, quote, ‘‘My findings 

lead me to an observation and a question for policymakers. The observation is that, while Congress certainly has the prerogative, it 

cannot micromanage, effectively, television and radio regulation.’’ 

Micromanage by setting an ownership cap? I’m sorry, but, again, 

we have a very different view of the role of Congress and our oversight responsibilities of tens, if not hundreds, of billions of dollars 

worth of spectrum and how it’s allocated and how it’s used. So, you 

know, I don’t believe we’ve been micromanaging at all. We are responding—we are responding—to an unprecedented number of our 

constituents, of American citizens, who contacted the FCC at the 

time of this rulemaking, expressing their deep and abiding concern 

about media consolidation. That’s what our job is. 

There has never been more comments to the FCC on any single 

issue than there was on media consolidation. And for us to consider 

the issue of overall media ownership, and call that micro-managing, we just have a different view of what the role of Congress 

is. 

Mr. COMPAINE. Senator, I wasn’t suggesting that you shouldn’t 

be having hearings or setting an overview. I just think that things 

are moving so quickly that today’s 39 percent might not be the best 

33 

number in four or 5 years, and that Congress isn’t set up to come 

back every three or 4 years to look at that. 

But I want to—I think I agree with you on some—well, maybe 

I shouldn’t—maybe not; we’ll see. I think that on—the thing about 

the—all those letters to the FCC, part of it is—it’s a little bit like 

the question, ‘‘Do you still beat your wife?’’ If people are asked the 

question, ‘‘Should the FCC allow greater media concentration,’’ I 

mean, everyone’s going to say no. And I think a lot of those responses were part of that reaction, that—you know, ‘‘We don’t want 

more concentration.’’ And it’s a much more complex question than 

that. 

My feeling is that we should be getting all this spectrum back 

from the broadcasters, as I know you wanted to impart. We have 

much greater uses for it. When so few people are actually using 

over-the-air, I think that—let’s, sort of, say, ‘‘Look, we’ve had all 

this trouble trying to get the public interest standard, what is it 

and how do we enforce it and’’—why don’t we just somehow say to 

these folks, ‘‘Return your spectrum. We’ll let you stay on cable. 

We’ve got much better uses for this stuff than what you’re doing 

for it. And you’ll pay for—you know, anything that you do keep, 

you’ve got to pay for.’’ I mean, this—— 

The CHAIRMAN. You just described my legislation, which was—— 

Mr. COMPAINE. Well—— 

The CHAIRMAN.—voted down, 13 to nine, and this—— 

Mr. COMPAINE. No, I know. And I was—— 

[Laughter.] 

Mr. COMPAINE. That’s why I say I think I agree with you more 

than—— 

The CHAIRMAN. I thank you. I thank you, Mr. Compaine. I really 

do. 

Mr. Thierer, let me come back to you, one other point, real quick. 

And, look, even though we disagree, we’re glad you’re here. And we 

think that your views contribute enormously to this debate. 

Under the rules the FCC issued last year, Business Week stated, 

quote, ‘‘Even in midsized cities such as San Antonio, for instance, 

one company might own the leading newspaper, two TV stations, 

eight radio stations, and several cable channels.’’ Does that concern 

you? 

Mr. THIERER. My general response to these sorts of questions is 

simple, that there’s, sort of, an ex-ante/ex-post question in this debate, which is, Do you want preemptive, prophylactic forms of regulation governing these issues, or do you prefer to go with a typical 

standard we apply to all other industries in this country for market-power concerns, which are the antitrust laws, which seem to 

work fairly well in these other areas? I would prefer the former— 

the latter, rather, where we basically look at these issues and say, 

if there is a serious market-power problem that creeps up after we 

allow the rules to disappear, we’ll handle it then. I think that’s the 

better way to approach this than—instead of attempting to honestly, as Mr. Compaine says, micromanage the exactly right number. We don’t know what the exactly right number is. Is 102 cable 

channels too many? Too few? I don’t know. 

34 

The CHAIRMAN. Well, I would argue that nowhere in history have 

you been able to unbundle once the merger or consolidation has 

been completed in the media, that I know of. But, anyway—— 

Professor Baker, do you have a comment on that? 

Professor BAKER. Actually, I think, with enough political will, debundling is possible, but it’s not likely with the huge conglomerates. But the Supreme Court approved the FCC’s forcing the sale 

of some newspaper/television combinations at a time where it was 

more interested in diversity than it is now. 

But the general point is absolutely right. We ought to be concerned with diversity in the market, like in San Antonio, which 

could have been incredibly limited under the FCC’s rule. 

Also, as to the antitrust versus other types of regulation, antitrust law is designed to limit the situation where one company can 

exercise control over price. Even in situations where one company 

can’t exercise control over price, like the price of advertising, it can 

exercise control over the content that most people in that area are 

going to receive. And when that’s the case there should be a concern. And that’s the reason you need different rules in the communications realm than the general antitrust concern with power over 

price. That’s even reinforced by the fact that concerns about power 

over content, power over voice, is integral to our notion of democracy. So I think antitrust, though I have no criticism of it, is an 

inadequate standard in the communications realm. 

The CHAIRMAN. Thank the witnesses. 

Senator Dorgan? 

Senator DORGAN. Mr. Chairman, thank you very much. 

This has been an interesting discussion, and has raised a lot of 

questions. 

First of all, have any of you ever planted corn with a tractor? 

All right. Let me read you something the Farm Bureau says 

about radio ownership and farming, because it goes directly to the 

question that we’re raising today. They say that, ‘‘The trend today 

in radio is to restrict and eliminate timely weather information, 

local news, up-to-the-minute market reports, and so on, affecting 

production agriculture. The trend today, instead of improving and 

maintaining these services, many radio stations are eliminating or 

curtailing farm news. And this relates, in large part, to media ownership rules, which allow large ownership groups to acquire multiple radio licenses.’’ 

Now, in point of fact, if you’re a farmer out there, you’re wondering about the weather, you’re wondering about the markets, and 

somebody a thousand miles away buys up that local station, puts 

in a homogenized bit of music and fires the local newscaster. And 

the question is, Is that in the public interest? It might be part of 

the market system, but it certainly is not in the public interest. So 

one cannot say there are more choices, there’s more competition, 

and good for everybody. 

Now, let me just make a couple of comments, then I have a couple of questions. 

Part of the argument here, Mr. Chairman, has been interesting. 

The circumstance of restricted choices has been described as a circumstance of expanded opportunities. Mr. Overholser, you suggested certain restaurants—we have 13,000 McDonald’s resVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00038 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\81581.TXT JACKIE
35 

taurants in the country. Now, if those McDonald’s, tomorrow, announced they have one new salad on the menu, and we were having this discussion about restaurants and menus, some of you 

would probably argue that there are 13,000 new choices for Americans. It’s only one salad, of course. Right? But you’d be here arguing that, ‘‘Look at the diversity, look at the competition, look at the 

new things, look at the expanded opportunities,’’ 13,000 new menu 

items. Nonsense. 

And, Mr. Thierer, I think you’ve contributed to this discussion. 

I disagree strongly with you, but you contribute by being here. I 

appreciate that. But I must say this, I have always thought that 

the conservative dogma, the conservative doctrine, is one that embraces and nourishes and refreshes the notion of competition. And, 

in fact, I think you’re arguing exactly against that point, which is 

surprising. 

Now, I’ll give you all a chance to respond to all of that. First, let’s 

respond to the question of corn. Since you’ve not planted corn, you 

won’t be too concerned about farm radio broadcasts. But do you accept the fact that these are diminishing all across the country because of changes in ownership and increasing media concentration? 

Mr. COMPAINE. I would—my wife is from Kansas, and I’ve seen 

a lot of corn. But I would suggest that needs a lot more investigation, because farmers were in the lead back in the early 1980s in 

using online services, from the Agriculture Department and others, 

in getting information. Long before the Internet, the agricultural 

community were buying Radio Shack TRS–80s before most people 

had these. I suspect that many of those farmers are getting much 

more specific information than they can get from that radio report 

by going online to specific sites that are giving them exactly what 

they need for even a smaller geographical area and perhaps for the 

specific kind of corn or a specific brand. 

So there may be some the—some of what you say, but I think 

most of it is just because farmers have found a better source of information. 

Senator DORGAN. But Mr. Compaine, you’re making an excuse 

for diminished services farmers are complaining about, so I don’t 

understand that. 

Let me make one other point, if I might, and then ask some— 

just a couple of questions. 

Jim Goodman has appeared before this Committee a number of 

times. He’s a broadcaster from North Carolina. And he talks about 

this question that some of you have raised about increased competition, increased diversity for viewers. And, you know, for example, there is, perhaps, increased competition between a program in 

which you see people eating maggots competing with a program of 

people wife swapping. I’m not sure those exist in exactly the same 

timeframe, but they’re both on network television. And so that 

competition now exists. And Mr. Goodman appears before this 

panel, I think, on two or three occasions—he’s a television owner, 

and he says, ‘‘You know something? I can’t keep these programs off 

my television even if I think they’re not appropriate because I am 

told from on high that, ‘You are to broadcast those programs. If 

not, you’ll lose the opportunity to have your affiliation with the network.’ ’’ 

36 

So, you know, this issue of competition and local ownership 

versus centralized control is one, I think, that’s well documented by 

testimony at the very table that you’re now sitting. 

So let me ask a couple of questions. Then I have colleagues, I 

know, that are anxious to ask question, as well. 

The point that you made, Ms. Overholser, about better journalism, you know, I, frankly, don’t think we can do much about 

that. But I happen to think increased competition leads us in the 

other direction. If you have, for example, in one community, as we 

have in North Dakota, all of the commercial radio stations being 

purchased by one company, I would ask any of you, Does that advance the interest of increased choices for consumers—better news, 

better information—or does it retard those interests, in your judgment? I mean, this is not theory; I’m just describing the case of 

Minot, North Dakota. The FCC allowed one company to buy all the 

commercial radio stations in that community. Does that advance 

the interest, Mr. Thierer? 

Mr. THIERER. Actually, I know Minot, South Dakota, if you check 

it up on the—North Dakota, I’m sorry—if you check it up on the 

Well Connected site, you can find that there are a few other owners 

of media outlets in that community. 

Senator DORGAN. All the commercial radio stations—— 

Mr. THIERER. Oh, on the commercial radio stations—I’m talking 

about broadly of other types of media outlets. 

Senator DORGAN. We’re just talking past each other. I’m talking—— 

Mr. THIERER. But in a very small—— 

Senator DORGAN.—about commercial radio stations. 

Mr. THIERER.—community, there might be a situation where one 

owner does own most of the media outlets, depending on the size 

of that community. 

However, going back to your farming question, to bring this full 

circle, I come from a family of farmers in Illinois, and when I was 

home—when I was home recently visiting some of them, I saw the 

most amazing sight while driving out of the state. I was driving 

past a farm where there was actually a satellite dish, for whatever 

reason, affixed to an old dilapidated outhouse. Now, I don’t know, 

I’m hoping they’re not watching satellite television in there. But 

the point is, is that it was a great sign of the times, that there was 

new technology in an old agrarian setting. And if you go out and 

you watch farmers do their work, you see them on cell phones, you 

see many of them have pagers now, and Blackberries. It’s an amazing technological revolution that’s happening in the farming community. 

Do they have enough farming news in all local newspapers and 

media outlets today? I don’t know. Farmers are one of many constituents of news and information, and they’re going to have to 

compete with others. And, of course, farming is on the decline, relative to other types of industry. So we have to take those realities 

into account, in terms of what’s reported. 

Of course a hundred years ago there was more agrarian reporting. There was more agriculture, in relative terms. 

Senator DORGAN. Why should they expect to have to compete 

with others if they are the customers of a radio station in a farmVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\81581.TXT JACKIE
37 

ing community that has decided that, ‘‘We’re now owned by a company a thousand miles away, and we want to do voice tracking and 

pour homogenized music over that radio station.’’ Why is that not 

dis-serving the very consumers for which we gave the license for 

that radio station to be on the air? 

Mr. THIERER. But if there is—certainly there must be some sort 

of an audience for those stations, or else they would go off the air. 

Because, quite frankly, the media is a business, and a lot of people 

live in denial about that. The only way that that commercial station’s going to remain viable in that community or any other is if 

it has listeners. Advertisers aren’t going to shower these companies 

with dollars unless there’s an audience. 

Senator DORGAN. Well—— 

Mr. THIERER. Somebody must be listening. 

Professor OVERHOLSER. I wonder if I can make a quick response, 

Senator Dorgan, to your good point, which, of course, is that you 

all can’t keep, you know, profit pressures from causing great diminishment of journalism. But I mention it because I think is important to keep this distinction in mind. A proliferation of outlets is 

what everybody keeps citing to say we’re good, we’re better than 

ever, when, in fact, a decline in journalism is what we need to keep 

in mind. And I believe that the FCC ownership rule changes enhance the opportunity for businesses to draw still further away 

from their local communities. 

And if you ask me, the remarkable response that you all got from 

your constituents after the FCC rule changes came in such degree 

and at that moment precisely because there are, indeed, people for 

whom the answer to your question, ‘‘You ask anyone, do you really 

want greater consolidation,’’ they’ll say no. Indeed, there were quite 

a few people, including owners of newspaper companies and television companies. And the coverage of those rules was very poor. 

There’s a marvelous Columbia Journalism Review article about 

just how poor it was. And is it a coincidence when the owners 

wanted these rules changes? So I think there is an important connection. 

Senator DORGAN. The Chairman indicated—and I’m pleased he 

did—that the FCC rules that have now been remanded back, at 

least in part, would have allowed, in the largest cities in this country, one corporation to own three television stations, eight radio 

stations, the newspaper, the dominant newspaper, and the cable 

company itself. I think that’s nuts. And I think to make the case 

that that somehow is moving in the public interest is absurd. This 

issue that there is this proliferation of opportunities for the American people—go to the news sites on the Internet, and I’ll tell you 

that the most visited news sites on the Internet are owned by the 

same dominant companies that are on broadcast television, that— 

there are only five or six—essentially five large combines here, and 

there are a handful of people that are now determining what the 

American people see, hear, and read. And a handful of people decided that John McCain should not be heard by 40 million people 

who don’t have cable television. Shame on them, in my judgment. 

And I hope—— 

The CHAIRMAN. I agree. 

[Laughter.] 

38 

Senator DORGAN. Well, I knew John McCain would agree, because he gave a great speech, and I wish he’d have given it at our 

convention. But—— 

[Laughter.] 

Senator DORGAN.—and I wish it had been—I wish it had been 

televised there. 

But the fact is, this is a very important debate. Mr. Chairman, 

you’ve been great in doing these hearings and allowing the American people to have at least some glimpse into this controversy. I 

appreciate that. 

And thank the witnesses for being here. 

The CHAIRMAN. I thank you. 

And our two colleagues have been very patient. I would point 

out, too, that NPR and PBS carried the conventions in their entirety, and their ratings were very good. It’s interesting. 

Senator NELSON. And so did C–SPAN. 

The CHAIRMAN. And C–SPAN—yes, C–SPAN, as well. Yes. 

Senator Fitzgerald? 

Senator FITZGERALD. You can let Senator Nelson—— 

The CHAIRMAN. Senator Nelson? 

STATEMENT OF HON. BILL NELSON, 

U.S. SENATOR FROM FLORIDA 

Senator NELSON. Mr. Chairman, I wish you’d have given that 

speech at our Boston convention, as well. 

[Laughter.] 

Senator NELSON. Senator Dorgan, I think it’s nuts, too, where 

you get that kind of concentration in a market. And I want to give 

you an example of that. I have an example of a tale of two media 

markets in Florida. The owners, as we were considering this media 

ownership rule and the cross-ownership, naturally, had come and 

made the arguments. Well, look at the Tampa market. Media General owns the Tampa Tribune, and they also own one of the prominent stations there, the NBC affiliate, Channel 8. And they pointed 

out the advantages of sharing the newsroom and all of that, which 

is a legitimate argument. But the big difference between the 

Tampa market, on this issue of cross-ownership, and the Orlando 

market is that the Tampa market has a vigorous competition between two newspapers; not just the one newspaper that also owns 

the television station—the Tampa Tribune—but a vigorous competition with the St. Petersburg Times; whereas, the Orlando market, the dominant newspaper, by far, is the Orlando Sentinel. If the 

Orlando Sentinel—the Chicago Tribune, in fact, owned news stations, such as the television stations, then I think you would start 

to move to a monopoly position away from more competition. And 

I just simply don’t think that that’s healthy. 

But let me ask you about a specific that has come up here today. 

The majority of the FCC and Mr. Compaine and Mr. Thierer seem 

to think that the Internet provides a multitude of voices to compete 

with the media giants. The Third Circuit considered this, and they 

rejected that. 

Now, are you aware—could you share with the Committee—of 

any independent websites that compete in this way? For example, 

39 

do you know of any independent Internet site that has had the resources to cover the war in Iraq? 

Mr. THIERER. Of course not, because a lot of those sites are small 

upstarts. They’re not going to have those resources. In fact, the 

companies that have the resources are the very large companies 

that many people obviously on this Committee would like to break 

up. And you can’t have it both ways. You’re going to have some 

companies that are going to be quite large, and some that are quite 

small that play more of a marginal role. But the economics of 

America’s media marketplace are not those of a corner lemonade 

stand. It takes a lot of scale, sometimes, to provide the resources 

and the types of services that we want to cover a lot of those 

things. At the same time, there can be a very important role played 

by bloggers on websites or independent news sources. I mean, 

think about what the Drudge Report did, whether you like it or 

not, regarding the impeachment of President Clinton. I mean, that 

is important, and that changed history. And so there are other examples like that, and there are going to be countless more as new 

technologies evolve in the future. That’s my opinion. The Internet 

doesn’t change everything, at least not yet, but it changes a lot. 

Mr. COMPAINE. But, if I may, there—I’ve looked at articles about 

the Middle East on Al Jazeera, the Times of London, the Guardian, 

the Times of India, which is one of the most accessed news sites 

in the United States. So they’re not necessarily U.S. companies, but 

that should be an attraction, that we can get different perspectives. 

You get a very different perspective reading Al Jazeera’s Englishlanguage news reports than you would getting any American news 

report, likely. So I think that there are far more sources there. 

Senator NELSON. You know, I agree with that, and I celebrate 

that fact, that we have that information at the access of our fingertips. Someone like you would go there. But the normal American 

consumer would not necessarily do that and they get this steady 

diet of information from their local market. And if you consolidate 

that, and you lessen the competition, then it just seems like we’re 

arguing against—I’d like to hear Ms. Overholser—— 

Mr. THIERER. But do they only get their news from local markets? And what is a media market today? Is Tampa the relevant 

market? Is Orlando the relevant market? Or are Tampa and Orlando citizens also receiving a lot of news and information from 

other national sources? Again, FCC statistics, 88-and-a-half percent 

of Americans currently voluntarily open their purses and wallets 

and purchase cable and satellite television network subscriptions, 

even though they have free over-the-air television choices at their 

disposal. Pretty soon, that number is going to creep up and up and 

up, and we’ll be looking at 95–97 percent penetration. At that point 

in time, a lot of people have voluntarily said, ‘‘Hey, I’m willing to 

take other sources of news. It’s relevant news.’’ And then a lot— 

more and more people online—that’s new type of information. It’s 

not local, it’s not national; it’s a little bit of both. It can be local 

and national. 

Professor OVERHOLSER. I agree with much of this. In fact, I think 

the question of who competes with whom is changing. But I would 

like to respond to your good point, Senator Nelson, about the competition in a given city, for example, or the Tampa Bay area. I 

40 

mean, you know, when I first covered the Colorado legislature 35 

years ago, I would sit around that table at the legislature, and 

there were radio reporters from around the state, and there were 

reporters from newspapers around the state, and there were reporters from the AP and the UPI, et cetera, et cetera. And there 

is a loss in that particular decline. There may be bloggers at the 

table in Denver, but what I’m talking about is the kind of—it is 

expensive to produce a report, and people don’t just go sit at the 

legislature and produce an edited report that the public needs to 

know. 

Now, in the Bay Area, you’ve got the St. Pete Times, which is 

owned by the Poynter Institute for Media Studies, which doesn’t 

have to ask more than 10 percent net income before taxes. It’s a 

terrific media competition. And no doubt, there are bloggers and 

everybody else. But who—you know, we really do need to worry 

about whether we’re protecting this stream of reporting that the 

public needs. And it’s great we have this diverse blogging community. And it makes a difference. It will improve standard journalism sources. But I don’t think, when we talk about putting all 

the local media in essentially the same hands, that we should 

blithely think that that won’t make a real difference. It will make 

a real difference. You have one less television reporter, it makes a 

difference. People notice things in a given community; and if you 

don’t have reporters noticing things, it won’t be noticed. 

Senator NELSON. Mr. Baker, did you want—— 

Professor BAKER. I agree with that. I mean, out—the Internet’s 

great. And for some people, reading Al Jazeera could be great. I’m 

not sure what percentage of the population of Tampa does that. My 

guess is, it’s not so large. And my guess is, Al Jazeera doesn’t report much about what’s going on in Tampa. And if people want 

local news, that’s just not going to provide it. 

The sources of local news that the Internet provides have not, in 

any study I’ve seen, been demonstrated to be of any significant 

amount. There’s local discussion. Internet is great. But you need 

resources to produce good news, the type of journalism society has, 

and that’s going to come from media entities. 

What we need is a structure that will increase the likelihood that 

the people at the heads of entities are willing and able to put resources into journalism. And a conglomerated—a consolidated 

structure is not the structure that’s going to do that. I think that’s 

the point that—I’m very pleased, I think the Senators understand 

that well. It’s not surprising that the Senators would understand 

the media quite well, but I think you’ve shown that very clearly. 

But it’s of vital importance that we have people that are willing to 

put resources into production of good quality journalism. 

Senator NELSON. Thank you, Mr. Chairman. 

The CHAIRMAN. Senator Fitzgerald? 

STATEMENT OF HON. PETER G. FITZGERALD, 

U.S. SENATOR FROM ILLINOIS 

Senator FITZGERALD. Thanks, Mr. Chairman. 

Mr. Thierer, I wanted to ask you where you’re from in Illinois. 

Mr. THIERER. Born in Peoria. I know how it plays in Peoria, Senator. 

41 

Senator FITZGERALD. Oh, that’s great. That’s great. 

Mr. THIERER. Family’s in the Roanoke area. 

Senator FITZGERALD. Well, fabulous, and welcome to the Committee. 

Mr. THIERER. Yes. 

Senator FITZGERALD. And please say ‘‘Hi’’ to your family. 

Mr. THIERER. I will. 

Senator FITZGERALD. I tend to believe that we really don’t have 

any problems with concentration in media at the national level. As 

Mr. Thierer said, 88 percent of the households subscribe to cable 

or satellite television. We have all sorts of national news outlets in 

print media and in broadcast media, and there are almost an infinite variety of choices on the Internet. However, if you go into local 

markets, the one place I do see concentration is not so much with 

television or radio stations, although there could be a few small 

markets where one owner owns all the radio stations in town. But 

I see concentration among small-monopoly local newspapers. And 

if I think of cities around Illinois, we really only have two vigorous 

newspapers in Chicago. If I look at Peoria, we have the Peoria 

Journal Star. They have a monopoly in Peoria. The Rockford Register has a monopoly in Rockford. The State Journal Register has 

a monopoly in Springfield. The Decatur Herald has a monopoly in 

Decatur. There’s a Champaign News Gazette, there’s a Bloomington 

Pantagraph. There’s one newspaper in each of those towns, and 

they have a monopoly. And they have a monopoly on the local, you 

know, political endorsements. Fortunately, all those papers I mentioned endorsed me when I ran for election. 

[Laughter.] 

Senator FITZGERALD. They have a monopoly on that. Candidates 

certainly have to go through that. If you’re a car dealer in the 

town, and you want to advertise your latest sales, you’ve only got 

one place you can go buy ads, essentially: your local newspaper. 

Now, that’s why many investment analysts will always tell you, if 

you want to own a newspaper, own one where it’s a monopoly, in 

a small town. Never own a second newspaper in a town. When 

there are two newspapers in a town the size of Peoria, rarely can 

they survive. Typically, one of them is run out of business. And I’d 

bet if you go back far enough, there were more than one newspaper 

in all those towns I’ve mentioned. 

But nobody seems to be mentioning this problem. And I think 

this is an obvious—if some of our panelists are for regulation, why 

not do something about local media monopolies? Shouldn’t they be 

outlawed? 

Mr. COMPAINE. This is something that I’ve been tracking for— 

back to my dissertation in 1978. There are a couple of responses. 

One is that these papers do have other—the local ad dealer—the 

local car dealer can use direct mail. Direct mail has been one of the 

most thriving forms of competition to newspapers. You know, 

whether it’s hung on the door—all sorts of approaches. Eighteen 

percent of our advertising is spent on direct mail, still. 

It’s an economic problem. The newspaper industry is a declining 

industry. In 1930s, we sold enough newspapers for 1.3 newspapers 

for every household. Now we sell less—less than half the households buy a newspaper. So it’s a matter of economics. As you say 

42 

you can’t support—there aren’t enough advertisers, because advertisers are now advertising on cable—local advertisers—and direct 

mail, there are weekly newspapers—there just isn’t enough advertising to go around to support multiple newspapers. The only reason papers today are surviving even at the lower level of investment—and the reason they can exist is because they don’t have direct competition. But they have competition—— 

Senator FITZGERALD. And they’re pretty good businesses, aren’t 

they—— 

Mr. COMPAINE. Well, they are, because—— 

Senator FITZGERALD.—if they have a local monopoly? 

Mr. COMPAINE. They are, exactly, but only because they’re the 

only one in town. They don’t have price—much pricing competition. 

If you look at the price of a newspaper today in real dollar terms, 

it’s the same as it was 20 or 30 years ago. From the consumer’s 

point of view, they can’t raise prices the way monopolists can because people just aren’t that interested. Despite the fact that the 

surveys say people say they get most of their local news from the 

newspapers, newspaper circulation in every one of your towns all 

around the country is declining, not only relative to households, but 

in absolute numbers. And that says something about—— 

Senator FITZGERALD. All right. For the panelists who favor some 

kind of controls to prevent concentration in media, are you at all 

concerned about concentration at the local level, or is it—should we 

just ignore it because it’s only local? 

Professor OVERHOLSER. Well, that’s my primary concern, Senator. I think the local level—I agree with you, on the national level 

we probably have less to be worried about. On the local level, I’m 

quite concerned. I don’t see it being economically likely that we’ll 

start having additional numbers of newspapers. But if you have a 

local newspaper and a decent local television news and a local 

radio reporter, and you’ve got people blogging and carrying on, 

you’ll have more vitality. I would have—I would—I mean, not 

only—— 

Senator FITZGERALD. Should we do something, though, to try 

to—— 

Professor OVERHOLSER. But what would you do? 

Senator FITZGERALD.—prevent these—well, that’s what I’m—— 

Professor OVERHOLSER. Create new—— 

Senator FITZGERALD. I mean, I don’t favor any regulation of the 

media at all, really. 

Professor OVERHOLSER. See, what I think is that what the FCC 

did was make it more likely that there would be less competition 

at the local level, and that, I think, is ill advised. We already have 

a problem with lack of competition. And if those newspapers, by 

the way, which we declare to be a declining business—we’re not demanding two-and-a-half times the profits that most industries demand—they might actually reinvest in their news so that, for example, the St. Pete Times, whose circulation is growing considerably—many newspapers that actually reinvest in their newsrooms 

are finding that good journalism is good business. But, alas, the notion that it’s a dying industry, and treating them as a cash cow, 

is contributing to the paucity of local news in many communities. 

Senator FITZGERALD. Professor Baker? 

43 

Professor BAKER. National concentration is a problem in terms of 

power over the public sphere about national debates, issue agendas. But local concentration is an immediate problem of people getting inadequate nourishment of local democracy. And so, in some 

ways, that’s the more pressing of the two, though both are important. 

The policies of the government have been directed toward newspapers. And the Newspaper Preservation Act was an attempt to 

create more competition, to keep newspapers alive. It was a newspaper-directed regulatory policy that made an exception and treated them differently than antitrust laws do, generally. 

Newspapers don’t need to be a dying industry. In some countries—in Japan and the Scandinavian countries—partly due to government policy, the readership of newspapers is almost four times 

what it is in the United States. 

The FCC rules could have an affect on this. Newspapers, as 

pointed out, when they invest in journalism may not maximize 

their profits, but they do get more readers. You can expand the 

readership of a local paper by having a better paper, but it’s costly 

to do so, which is the reason why some corporate owners have decided they would rather have it be a dying industry, they’d rather 

cut their circulation. 

If you allow consolidation, the likelihood of that type of judgment 

occurring more and more increases. There’s also other effects—the 

cross-ownership of a broadcaster and a paper, the ownership of the 

television station and the one newspaper in a town, not only increases huge power; the tendency is for the reporters at the newspaper to have to take on new jobs, which, as was pointed out, 

means they can do less journalism, so you decrease the quality of 

the most important of the local news sources: the newspaper. At 

the same time, you reduce the overall expenditure of resources on 

journalism when you combine the broadcaster and the local newspaper. 

So there are things to be done. There could be policies that were 

solely newspaper directed that would be perfectly constitutional 

and would make at least debatable sense. I’ve argued for some. But 

those aren’t on the table at this point. But the things that FCC 

has—was doing was taking away regulations that made perfect 

sense in terms of maintaining both quality at the local level and 

competition at the local level. 

Mr. THIERER. Senator, if I could make one quick point, building 

on your last argument about newspapers that—it is true that 

newspapers are in relative decline as an industry, but, by all the 

statistics the government currently collects, other forms of periodicals—whether they be weeklies, semiweeklies, various types of 

journals, magazines, newsletters—are all increasing; and, in some 

cases, increasing quite rapidly. In fact, I know in many communities you go home, and it’s not just the local big newspaper you 

get, you sometimes get a free weekly reader sometimes. I get the 

McLean Herald out in my subdivision. So there are other forms of 

news and information, printed information, that are competing 

with newspapers; not keeping them traditionally to be just monopolies, but maybe quasi-monopolies. But the better news is, of course, 

you can go to other communities and find news now on the InterVerDate Nov 24 2008 09:56 Jun 25, 2013 Jkt 075679 PO 00000 Frm 00047 Fmt 6633 Sfmt 6601 S:\GPO\DOCS\81581.TXT JACKIE
44 

net, and download other types of information. Not all of it’s going 

to be about your local community, but, again, some of that is being 

driven by a natural organic shift in our society away from local 

news toward national sources. I’m not sure what’s made that happen. I don’t know how the USA Today went from nothing in 1982 

to the world’s most popular paper today. I don’t read it, I don’t like 

it; it just happened. But that’s the reality. Forty-nine percent of 

The New York Times delivery is now out-of-market to the doorstep 

or to business. 

Professor OVERHOLSER. That happened on the backs of oncegreat newspapers, like the Des Moines Register, also owned by the 

Ganette Company. 

[Laughter.] 

The CHAIRMAN. I thank the witnesses. This has been helpful. I 

think it’s an issue, as I mentioned in my remarks to Mr. Compaine, 

that has a great deal of interest around America, far more than 

many of us had expected when we took up this issue, because some 

of the aspects of it are rather arcane. 

I remain concerned about continued consolidation. I think that 

radio is the miner’s canary. And yet I am also confident that the 

National Association of Broadcasters, who refuse to allow even lowpower FM stations to come into being—I’d be interested, sometime, 

in your views on that, Mr. Thierer—the blocking by the National 

Association of Broadcasters of low-power FM stations will probably 

prevail here again. But we won’t give up the fight, because sooner 

or later people are going to be very disturbed at the situation as 

it is evolving, which, as I said, I think the 1,200—going from a 

hundred-and-some stations to 1,200 stations in just a few years is 

ample evidence of what can happen in other aspects of the media. 

I thank the witnesses for being here today, and I thank you for 

your input. And you’ve contributed, and I appreciate you taking the 

time and effort to prepare your statements, present them, and respond to our questions—in your case, Mr. Thierer, insults, as 

we—— 

Mr. THIERER. I’m used to it. 

[Laughter.] 

The CHAIRMAN. So we look forward to continuing this debate. 

You’ve all contributed, and I appreciate it very much. 

This hearing is adjourned. 

[Whereupon, at 11 a.m., the hearing was adjourned.] 

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