June 5, 2000
In the Matter of Applications for Consent to the Transfer of Control Of Licenses and Section 214 Authorizations from MediaOne Group, Inc. to AT&T Corp.
As with its approval of the CBS-Viacom merger, the Commission has once again failed to consider seriously the significant impact that an AT&T-MediaOne combination could have on the diversity of media voices. By focusing primarily on technical compliance with our rules, the Commission has not sufficiently analyzed whether the proposed transaction will undercut a fundamental purpose of the Communications Act -- maintaining independent sources of news and information.(1)
The importance of television to the democratic process cannot be overstated. A majority of Americans still rely on television as their primary source of electoral information.(2) How information is presented - or not presented - has the power to shape public opinion and debate. Under today's decision, AT&T could come into compliance with the horizontal ownership rules by divesting its interest in small cable systems that lack significant programming assets rather than divesting its interest in Time Warner Entertainment (TWE) and/or Liberty Media. If AT&T chooses that course, it will own, or have an attributable interest in, 22 of 59 (37%) of the basic cable services that have reached the requisite number of subscribers - 15 million - to achieve viability.(3) AT&T will also own, or have an attributable interest in, 3 of the top 4 premium channels (HBO, Cinemax and Starz!).(4)
This level of concentration should not be looked at in a vacuum. Rather, it must be examined in the context of the number of independent voices to which consumers have access on television. The major television broadcast networks - ABC/Disney, CBS/Viacom, News Corp./Fox and NBC - own 18 of the 59 basic cable networks that have reached the 15 million-subscriber mark, and 1 of the top 4 premium services (Showtime). Thus, when combined with a merged AT&T-MediaOne, five companies will control 40 of 59 (68%) of the currently viable cable networks, the top four premium cable channels, as well as all of the major broadcast networks. Adding Time Warner's non-TWE programming to the mix means that six companies will control at least 47 of 59 (80%) of today's viable cable programming services.
Thus, as a result of this merger, five or six large companies may end up controlling the vast majority of what American see and hear on television. True, our horizontal rules are designed to ensure that theoretically a new programmer would not need carriage on the largest cable systems in order to survive, but we cannot ignore the reality of what Americans are actually watching. This is not simply an academic exercise, but a matter of critical importance to our democracy. As the New York Times recently stated:
The rules that govern concentration in telecommunications are unlike antitrust laws. In the bottled water and sneaker markets, mergers are allowed unless antitrust authorities can prove that added concentration would do harm. If the authorities err, and permit excessive consolidation, about all that happens is that the price of bottle water rises and innovation slacks off in the design of sneakers. But in telecommunications, the threat that concentration might shut off sources of information is profound.(5)
It's time for the FCC to realize that we are not dealing with bottled water or sneakers, but with the dissemination of news and information -- the lifeblood of our democratic way of life. In the past few years, the number of entities that control what people watch on television has dwindled to alarming levels. With this decision, the FCC has failed yet again to stem this crisis and ensure a robust marketplace of ideas.
1 See, e.g., Communications Act, 47 U.S.C. § 257 (1996) (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 Arkansas Ed. Television Commission v. Forbes, 523 U.S. 666 (1998).
3 See Paul Kagan Assocs., Cable Network Television Household Growth 1998-1999, Cable Program Investor, at 4-5 (Mar. 17, 2000); Liberty Media Corp., Affiliate List, www.libertymedia.com (last updated 1999); Time Warner Inc., 10-K for the year ended 12/31/99, at I-3 to I-7; AT&T/Media One Application. See also Horizontal Ownership Third Report and Order, 14 FCC Rcd 19098 (1999) at para. 41.
4 See Cahners Business Information, Cablevision Database: Network Subscribers, www.cablevisionmag.com/database/db_pay.asp (last updated 2000).
5 The F.C.C.'s Ownership Rules, The New York Times at A24 (June 2, 2000).