Tech Media Antitrust Action Needed for Restoration

20 for 2020 is a newsletter sent to 20 people in preparation for the U.S. Presidential election of 2020. This is the eleventh newsletter it is part one of a two part series on the internet and its impact of the change in medium for news. The previous issue focused on the internet, advertising revenues, business models and the business of the news.  This issue will focus on historic protections and regulations assuring freedom of the press and the public interest.

Having News that is diverse, competitive, honest, balanced, accessible, objective and where the privacy of the viewer is protected is in the public interest. 

An objective and independent press is important in a democracy so citizens can readily be informed of issues of concern. In the United States, News is a business. Most news and news vehicles, historically and currently, are supported primarily advertising revenue, although this is changing. Freedom of the press is protected by the constitution. Radio, telephone, television and cable and until recently, the Internet are regulated by the Federal Communications Commission (the FCC). 

Cable television brought about a decrease in regulation from the FCC and Congress, an increase in the fragmentation of television audiences that is reached by any one vehicle at the same time, and a decrease in advertising revenue for the major networks.   This has been magnified by the internet which is a highly concentrated platform and is largely controlled by seven corporations.

Print media has historically been viewed as infinite in that as many publishers could publish as many publications as they like without interfering in a competitors ability to do the same and radio (and later TV) was finite as radio spectrum is finite. The Internet has shown itself to be an elusive medium, yet it is now the dominate medium for ad revenue and increasingly for news and its power is highly concentrated.

In 2015 the Obama-era FCC reclassified broadband service providers as "common carriers" like traditional telephone companies, giving the agency broader authority to regulate broadband providers. This was known as net neutrality and its premise is that Internet Service Providers (ISPs) shouldn't be able to block some sorts of data and prioritize others or throttle or charge more for fast lanes for data. In 2017, the FCC voted to overturn this and in doing so also gave up much of its jurisdiction in this area and stated that states couldn’t be more restrictive than the FCC. This is now being brought back into question and the FCC will be taking comments from the public until March 30, 2020.

According to The Radio Act (1927) limited broadcasting to licensed broadcasters but mandated that licensees serve the public interest in that ‘the goal of the Federal Communications Commission (FCC) from the start has been to serve the public interest’ and in 1928 the FCC determined that the emphasis must first and foremost be “the public interest, convenience and necessity of the listening public and not on the interest convenience and necessity of the individual broadcaster or advertiser.’ The FCC regulations reflected the presumption that “it would not be in the public’s interest for a single entity to hold more than one broadcast license in the same community.’ This was later turned into law.

The Communications Act of 1934 created a powerful entity to monitor the airwaves- a seven member Federal Communications Commission to oversee both radio and telephone communication. The FCC was to serve the public and prevent monopolies. The FCC granted broadcast licenses. In 1949 the FCC introduced the Fairness Doctrine, a policy that required the holders of licenses to both present controversial issues of public importance and to do so in a manner that was (in the FCC’s view) honest, equitable and balanced. The equal time rule was later adopted. It specified that U.S. radio and television broadcast stations must provide an equivalent opportunity to any opposing political candidates who request it. 

In 1975 The FCC passed the newspaper and broadcast cross-ownership rule which prohibited the ownership of a daily newspaper and any full powered broadcast station that serviced the same community.

The advent of cable changed things. According to the FCC Website:  In succeeding years the FCC eliminated or modified many of the rules. Following the 1984 Cable Act, the number of households subscribing to cable services increased as did the channel capacity. However, competition among distributors of cable services did not increase and in many areas the rate for cable services outpaced inflation.

In 1996, adopting The Telecommunications Act of 1996, Congress noted it wanted to provide a pro-competitive, de-regulatory national policy framework designed to accelerate rapidly private sector deployment of advanced telecommunications and information technologies and services to all Americans by opening all telecommunications markets to competition. The Act stipulated that the FCC must conduct a biennial review of its media ownership and shall determine whether any such rules are necessary in the public interest as a result of competition. The Commission is ordered to repeal or modify any regulation in determines will no longer be in the public interest, It was also the first time internet was included in broadcasting and spectrum allotment.

This resulted in mergers of several large companies and 4,000 radio stations and minority ownership dropped to its lowest point since tracking began in 1990. In June 2003 the FCC had a single public hearing and then voted 3-2 to repeal the newspaper broadcast cross-ownership ban and to make changes to or repeal a number of other ownership rules as well. This is a progression of the FCC losing its original focus. Licenses are no longer reviewed for “public interest” considerations.

In August of 2011 the FCC voted to remove the rule that implemented the Fairness Doctrine along with more than 80 other rules and regulations, following an executive order given by President Barack Obama. In 2017 the FCC eliminated its rule that had previously prohibited common ownership of a full power broadcast station and a daily newspaper and eliminated some radio television cross-ownership rules. The FCC Commissioner’s thinking is to allow traditional media companies to better compete with the mega internet companies like Google, Facebook and Apple.

According to eMarketer report published in Feb. of 2019, it was predicted that digital ad spending will exceed traditional ad spending in the U.S. for the first time and by 2023. Digital will surpass two-thirds of the total media spending. Total digital ad spending in the U.S. will grow at 19% to $129.34 billion, an estimated 54.2 % of all advertising, Google making up 38.2%and Facebook comprising 21.9% of all digital advertising. Radio ads were projected to decrease 1.8%, TV ads projected to decrease 2.2 % and print ads projected to decrease 17.8%. 

Internet ads are frequently tailored to the person and a mining of the persons habits through technology can be involved. This isn’t the case with traditional media where the ads are targeted to demographic profiles. Using personal information to target selling is a practice deemed unethical by market researchers.

Re-instating The Fairness Doctrine, and having Internet ads conform to the privacy afforded those that read newspapers or watch television are in the public’s best interest. The FCC needs to review its history and return to its initial values. We need more smaller organizations not fewer larger organizations.