May 3, 2000
STATEMENT OF COMMISSIONER GLORIA TRISTANI, DISSENTING IN PART
Re: CBS-Viacom Merger
The Commission's Order approving the merger between CBS and Viacom is most notable for what it fails to address. As mystery readers know, sometimes it is the dog that does not bark that explains a situation's underlying reality.
First, the Order completely ignores the effect of the CBS-Viacom merger on one of the fundamental purposes of the Communications Act - maintaining a diversity of media voices. (1) The potential concentration of viewpoints on television is especially important. Television is still the means by which most Americans get their news and information, and is still the medium that children spend far more time with than any other. (2)
One would never know from the Commission's Order that this merger involves the combination of two of the behemoths of the media industry. CBS owns, among other interests, the CBS network (with over 200 affiliates), 20 television stations, 162 radio stations, cable networks TNN and Country Music Television, King World and Eyemark Entertainment. Viacom owns, among other interests, the UPN network, 17 television stations, Paramount Pictures, Paramount Television, Spelling Entertainment Group, Blockbuster Video, Simon and Schuster, and cable networks MTV, Nickelodeon, Nick at Nite, VH-1, Showtime, TV Land and the Movie Channel.
Will the combination of these assets give one entity too much control over the marketplace of ideas? The Commission provides no analysis, and, most disturbing, does not even ask the question. The Commission's failure to examine this issue constitutes an abdication of its responsibility to ensure that the merger will serve the public interest and effectuate the purposes of the Communications Act. (3)
Ultimately, the American public will pay the price if they do not have meaningful access to the diverse and antagonistic viewpoints that democratic deliberation requires.
I express no opinion on the results of such a diversity analysis in this case. But the Commission's failure to even raise the issue is an ominous development for those who are looking to the Commission to examine these mega-mergers in their broader context, rather than simply as a mechanical exercise to verify compliance with specific rules.
Radio Market Definition
Second, the Commission fails to acknowledge that it shifts the definition of "radio market" to suit its purposes. In particular, the Commission ignores the conflict between the definition of radio "market" it applies to the one-to-a-market rule and the definition of radio "market" that applies to the local radio ownership cap rules. Put simply, under the market definition adopted for the one-to-a-market rule, a radio station is present only in the Arbitron market to which it is assigned (unless its contour completely encompasses the city of license of a television station in another market, as CBS's San Francisco radio station KFRC(AM) does in Sacramento). By contrast, under the local ownership cap rules, a radio "market" is defined as all stations with signal contours that overlap the commonly-owned stations, regardless of the Arbitron market to which those stations are assigned. The Order's failure to address the conflicting market definitions is all the more glaring because the one-to-a-market and local ownership cap rules are contained in the very same section of the Commission's rules (Section 73.3555).
I understand the desire to pretend that the local ownership cap rules do not exist. As I have written on several occasions, those rules are irrational and there is no defending them. (4)
One of the problems is that a radio market definition based on overlapping signal contours often results in markets that bear little relation to reality. (5) The Order implicitly agrees, rejecting the notion that radio markets should be defined by overlapping signal contours. Instead, the Order looks to the markets established by a commercial ratings service as a more appropriate reflection of which stations actually serve particular listeners. Logically, the Commission's shifting definitional approach makes no sense. Either radio stations with overlapping signal contours should count as being in the same "market" or they should not. They cannot count as being "in the market" for one part of Section 73.3555 and then "out of the market" for another.
Beyond the illogic, these conflicting market definitions have a clear real-world effect: they permit more consolidation than if the Commission applied a consistent market definition. For the local ownership caps, the more stations that count as being "in the market" the greater the consolidation, because the rules provide for increasing levels of ownership as the number of stations in a market increases. A radio market definition based on signal contour overlaps can dramatically increase the number of stations in the "market" as distant stations whose signals overlap with the outermost reaches of stations in the market are swept into the count. In the recent situation in Wichita, Kansas, for example, the Commission's signal contour approach more than doubled the number of stations that Arbitron assigned to the Wichita market -- from 24 to 52 stations. That increase meant that an entity could own up to eight stations in Wichita, rather than only six that would be possible under Arbitron's station count. Similarly, CBS owns 5 FM stations in the 38-station Sacramento Arbitron market. But in a 38-station market, CBS would be limited to no more than 4 FM stations. In order to be able to own a fifth FM station, CBS must rely on out-of-market stations with overlapping signal contours as being "in the market."
For the one-to-a-market rule, the consequences of using a signal contour method are reversed -- bringing additional stations into the market generally would restrict consolidation. Here, for instance, CBS-Viacom will own one television and 7 radio stations in both the San Francisco and Sacramento markets. That could not happen under a signal contour approach, because the San Francisco stations would put CBS-Viacom over the one-to-a-market rule limit in Sacramento, and vice versa.
In other words, the Commission treats the San Francisco and Sacramento stations as being in the same market to permit a level of consolidation that otherwise would not be possible, but then it treats them as being in separate markets when counting them together would limit consolidation under other rules. It's tempting to say that the Commission simply adopts whatever definition of radio market will maximize consolidation, regardless of logic or consistency. One might be able to dismiss such a charge as cynical, but not as inaccurate.
Those who are counting on the Commission to use its public interest authority to scrutinize the impact of huge media mergers should be disheartened by this decision. The Commission shows little sensitivity to the broader context in which these mergers are taking place, and little stomach for limiting consolidation based on diversity concerns. The sound of a dog not barking is a clue; the sound of a watchdog not barking is a problem.
1 See, e.g., Communications Act, Section 257 (noting that one of the "policies and purposes" of the Communications Act favors a "diversity of media voices"); Metro Broadcasting, Inc. v. FCC, 497 U.S. 547, 567 (1990) ("Safeguarding the public's right to receive a diversity of views and information over the airwaves is therefore an integral component of the FCC's mission"); Turner Broadcasting System, Inc. v. FCC, 512 U.S. 622, 663 (1994) ("[I]t has long been a basic tenet of national communications policy" that "the widest dissemination of information from diverse and antagonistic sources is essential to the welfare of the public"), quoting United States v. Midwest Video Corp., 406 U.S. 649, 668 n.27, quoting Associated Press v. United States, 326 U.S. 1, 20 (1945).
2 Kaiser Family Foundation Report (1999) (finding that, on average, children watch 2 hours and 46 minutes of television a day, compared to 48 minutes spent listening to CDs or tapes, the second most popular media activity).
3 See Communications Act of 1934, Secs. 310(d) and 309(e); Application of Telecommunications, Inc. and AT&T Corp., 14 FCC Rcd 3160, 3168-69 (1999).
4 See, e.g., Press Statement of Commissioner Gloria Tristani re: Mass Media Bureau Approval of Radio License Transfers in Youngstown-Warren, Ohio and Lafayette, Louisiana (March 20, 2000); Press Statement of Commissioner Gloria Tristani re: Applications for Radio License Transfers in Augusta-Waterville, Maine (rel. Feb. 28, 2000); Press Statement of Commissioner Gloria Tristani re: Mass Media Bureau's granting of applications to transfer radio licenses from Fuller-Jeffrey Broadcasting to Citadel Broadcasting in Portland, Maine (rel. Aug. 19, 1999); Dissenting Statement of Commissioners Susan Ness and Gloria Tristani, In re Applications of Pine Bluff Radio, Inc. and Seark Radio, Inc. File Nos. BAL-970103EA, BALH-970103EB, BALH-970103EC (rel. April 12, 1999); Joint Statement of Commissioners Susan Ness and Gloria Tristani, In re Station KBYB(FM), El Dorado, Arkansas, 13 FCC Rcd 15685 (1998).
5 See, e.g., Press Statement of Commissioner Gloria Tristani re: Mass Media Bureau Approval of Radio License Transfer in Wichita, Kansas, (March 24, 2000) (although Arbitron assigned only 24 radio stations to the Wichita, Kansas market, the Mass Media Bureau counted 52 radio stations in the market under the contour overlap approach, including several Oklahoma stations whose signals did not even reach Kansas).