FCC Warned of 'Homogenization’

Los Angeles— In this city and nearby El Segundo, Calif., last week, a phalanx of Hollywood union members and community activists criticized the dampening effect of media consolidation on creativity and diversity of voices in broadcasting, while local station executives explained that multiple outlet ownership is necessary to compete with pay television.

Vociferous crowds gathered in both locations to express their feelings to the Federal Communications Commission, which convened in the communities for the first of six regional meetings to seek input on possible changes to rules governing media consolidation.

The federal panel changed those rules in 2003 on a 3-2 vote (current commissioners Michael Copps and Jonathan Adelstein dissented), allowing greater cross-ownership of media outlets in individual communities. The commission got more than 3 million messages from consumers opposing the policy, as well as congressional opposition. A federal appeals court overturned the policy and sent it back to be reworked by the FCC.


The Hollywood trade unions took their tone from Writer’s Guild of America, West president Patric Verrone, a writer for Futurama. They testified at the first part of the hearing at the University of Southern California.

“Homogenization is good for milk but bad for ideas,” Verrone told the panel. He and others stressed that big media companies including Viacom Inc. and The Walt Disney Co. use their market power to squeeze wage concessions out of writers, directors and producers.

The trend has all but eliminated the role of the independent producer in TV, said Stephen J. Cannell, a once prolific producer (The Rockford Files, The Commish). He explained that when he developed Rockford, executives at its intended home, ABC, “hated everything” about a show where the private investigator cuts and runs at the first sign of trouble. Because a then-unaligned studio, Universal, was his partner, he was able to take the series to CBS where it became an Emmy-winning hit.

Today, the networks demand to be the production partner, he said, so if a producer doesn’t bow to network creative decisions, a show doesn’t get on the schedule, he said.

Actress Anne-Marie Johnson, Screen Actors Guild first vice president, added that big media companies use their market share to ignore an actor’s “quote,” the market value they use when negotiating individual performance contracts. She stated that recently, she’s been offered half of her traditional wage and told, “Take it or leave it.”

SAG has asked the FCC for a mandate that 25% of a broadcaster’s schedule must come from independent producers.

Diversity advocates and technical unions noted that cross-ownership has lead to consolidation in local network newsrooms, leading to coverage of fewer stories by workers who are overextended. More of the news shows are being dedicated to promotion of entertainment programming and by video press releases, produced by corporations but aired as news, they said.

At the USC hearing, only one brave soul, a representative of Freedomworks, which advocates reduced government oversight, testified in support of the “natural market” forces that have lead to media consolidation. (Freedomworks is known to the cable industry as one of the “grass roots” groups promoting statewide cable franchising.)

That person was shouted down by a crowd that cheered and whistled for any anti-consolidation sentiment, and jeered the commissioners with shouts of “Listen! Listen!”

The broadcasters got their turn at the evening forum in El Segundo. Bruce Owen, a Stanford University economist appearing on behalf of CBS, ABC and Fox, said the debate would be more reasoned if the target business was bakeries.

There is nothing more common than vertical integration, he said, where companies make business decisions to make their own product when an outside supplier asks too much.

The media market is even more competitive today than when the FCC tried to change the rules in 2003, he said, with the proliferation of news and information via broadband and the arrival of iPods.

“There is no rational basis” for regulatory intervention, he said. The crowd loudly booed him.

Los Angeles is a poster child for cross-ownership. The Tribune Co. owns KTLA-TV and the Los Angeles Times. Fox owns KTTV-TV and KCOP-TV; Viacom Inc. owns KCAL-TV and KCBS-TV. Most own radio outlets in the city as well as cable networks. The companies are operating on waivers of the cross-ownership rules while the FCC determines outlets they may have to sell.


Vincent Malcolm, vice president and general manager of KTLA, said Los Angeles is the most competitive market in the world, noting that in addition to broadcast consolidation, Time Warner Cable’s acquisition of the Adelphia Communications Corp. cable properties makes it the cable supplier to 70% of the greater Los Angeles market.

Broadcasters steadily lose market share as desirable programming such as Monday Night Football is migrated to media giant’s cable networks, he said.

“The growth rate of local cable and the Internet is greater than ours,” added Paula Madison, president and general manager of KNBC and executive vice president, diversity for NBC Universal. “Cable has far more inventory to sell and no federal restrictions (to deal with).”

“Those of it who can still afford it still cover local communities,” she said, noting NBC Universal has 7,000 employees across the country supporting local productions, two-thirds of whom work in news, content with no repeat or reuse value.