How we got here The beast by the tail

In keeping with the current hankering for all things circa 1920 - a Calvin Coolidge impersonator in the White House; foxes guarding the hen house; equating wealth with virtue - the FCC seems bent on returning media ownership to its hoary past, when a single entity controlled virtually all interstate radio programming in the United States. The history of American media regulation fits Cold War author Arthur Koestler's observation about ethics and technology: Our efforts to understand its implications for society and manage it accordingly are always a step behind the industry's capabilities.

Congress created the Federal Communications Commission with the Com- munications Act of 1934, charging the commission with regulating interstate and international broadcasting by wave or radio. In the mid-'30s, the Radio Corporation of America (RCA) already had a stranglehold on the airwaves and was positioning itself to dominate the new medium of television, which would officially go public and commercial in 1941.

RCA was formed in 1919 by a consortium of powerful household names that ring familiar today: General Electric, Westinghouse, American Telephone &Telegraph, and United Fruit. During World War I, the U.S. government seized the assets of American Marconi (an Italian business when Italian was suspect) and concentrated the patents of U.S. radio companies for military use. During and briefly after the war, President Woodrow Wilson's administration flirted heavily with the idea that certain industries ought to be seen as "natural monopolies," some even operated by Washington. It was in this atmosphere that GE and AT&T were able to wrangle out of Congress a monopoly on international broadcasting - a virtually complete domination that held until 1934 when the Justice Department declared that such ownership violated antitrust law.

During its brief reign as supreme commander of the airwaves, RCA created the National Broadcasting Company. NBC in turn operated two networks with Dr. Seuss-like names: Red and Blue. In 1943, backed by a Supreme Court ruling, the FCC succeeded in forcing NBC to sell the Blue Network (purchased, interestingly enough, by the man who invented Life Savers; he would eventually rename it the American Broadcasting Company).

In the meantime, the Local Radio Ownership Rule and the National Television Ownership Rule in 1941 restricted the number of radio stations a company could own in any one market and prevented broadcasters from owning TV stations that reached more than 35 percent of the nation's homes.

Despite this effort, the names of subsequent rules tell the story of a regulatory body chasing the tail of a beast it can't quite catch: the Dual Television Network Rule of 1946 prohibited a major network from buying or merging with another major network; the Local Television Multiple Ownership Rule of 1964 prevented a broadcaster from owning more than one station in a market with less than eight stations; the Radio/Television Cross-Ownership Restriction of 1970 forbade the ownership of television and radio stations in the same market; and the Newspaper/Broadcast Cross-Ownership Prohibition of 1975 - you guessed it - preventing the ownership of broadcast and newspapers in the same market.

Most of these rules have since flown out the window.

The mid-'70s were the last hurrah for media regulation. With "Morning in America" came a wave of Reagan-era deregulation that laid the groundwork for the Telecommunications Act of 1996. Between 1981 and 1985, television licenses were extended from three to five years, and the number of TV stations a company could own was raised from seven to 12. Just as drastically for the public, guidelines were lifted that controlled the amount of advertising that could be aired per hour and stations were no longer required to broadcast minimum amounts of non-entertainment programming.

In 1987, FCC eliminated the Fairness Doctrine. Legislators tried to reinstate the law, only to be vetoed first by Reagan and then by George H. W. Bush.

The '80s also brought the demise of the controversial Fairness Doctrine. The doctrine required broadcasters to make "every reasonable attempt" to cover contrasting points of view, and perhaps even more importantly, called for stations to perform public service by seeking out and reporting on issues of critical importance to their communities. Stations had to document their efforts to cover local issues as part of their renewal applications for broadcast licenses.

Journalists and free speech advocates were not all fans of the Fairness Doctrine, however, because many believed it had a chilling effect. Rather than raise the possibility of a lawsuit, or feel compelled to give airtime to anyone who might have a legitimate claim to presenting a "contrasting" point of view, critics argued, broadcasters would avoid controversial subjects. President Reagan's FCC chairman, Mark Fowler, had made abolishing the doctrine a focal point of his agenda, and in 1985, the commission issued a "Fairness Report" that claimed to corroborate the chilling effect. The report also claimed that stations had compelling commercial reasons to cover critical local issues and didn't need government regulation to force them to do so.

A subsequent Supreme Court case, Meredith Corp. v. FCC, ruled that the FCC didn't have to enforce the doctrine because it wasn't a law passed by Congress. In 1987, FCC eliminated the Fairness Doctrine. Legislators tried to reinstate the Fairness Doctrine, only to be vetoed first by Reagan and then by George H. W. Bush.

Throughout the '80s and '90s, deregulation of the industry had a startling and damaging effect. A 2002 research study by the FCC, conducted in 10 representative American markets, found that while the number of media outlets had increased by 200 percent since 1960, ownership had increased by only 140 percent. This may not sound too drastic until you consider that the number of media owners has remained almost static since 1980. "This is mainly due," notes the summary, "to tremendous consolidation, especially in the radio industry, since passage of the 1996 Telecom Act."

Eight years later, the FCC has proposed rules that would further consolidate media ownership `see story, next page`, bringing us full circle to the '20s era of bathtub gin, the Palmer Raids, and the $5 workday. •

By Elaine Wolff

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