FCC Deregulates Media Ownership
Despite increasingly vocal opposition, the FCC approved changes in media ownership regulations on June 2, 2003 that are expected to lead to a new series of mergers as media companies seek to expand and enter into new combinations in local markets across the U.S. Changes the FCC made included raising the percentage of the nation's TV households one company can reach from 35% to 45%. It lifted a 28-year band on allowing newspaper and broadcast combinations in larger markets and is also allowing one company to own more radio stations locally. The vote split along party lines 3-2, with three Republication commissioners voting for the change and two Democrats objecting. The FCC did not touch the ban on mergers among the four major TV networks, but they do stand the most to gain from the vote. The FCC received more than 750,000 pieces of mail -- the most related to any one issue in the history of the FCC. Many critics claim that further consolidation will drown out minority viewpoints and destroy competition. Some say it will lead to more unemployment in the entertainment industry.
The following industry people and corporate entity spokesman had this to say about the ruling:
Today's decision is a first step in responding to Congress's and the court's mandate that the FCC's broadcast ownership rules reflect the rapidly evolving, highly competitive and diverse media landscape. It will help ensure that free, over-the-air broadcasting continues to be available across America, while enabling media companies to succeed as they always have by serving local communities.
Rick Mischel, ceo, Mainframe Entertainment:
Consolidation of television stations will make it harder for independent producers and studios to secure broadcast space, as vertically-integrated conglomerates will have incentive to show their own in-house developed programming rather than programming from independents. More consolidation means independents will have a harder time hanging on to the rights to their shows. Consolidation means that advertising rates could climb, and original production of animated commercials could decline. strict enforcement of anti-trust laws should prevent this.
Neil Court, partner/executive producer, DECODE Entertainment Ltd.:
Loosening up local media ownership rules in the U.S. has no immediate impact on us or on the independent animation business in the U.S. However, it's evidence of the republican's belief in "bigger is better." Bigger media usually means bad things for indies, since it leads to fewer buyers and less competition. But practically, for independent animation companies, our buying community (large free TV networks and cable channels) are already fully vertically integrated 10-ton gorillas, so the FCC changes won't make any real difference to us.
The decision is an important step toward recognizing the realities of today's broad and competitive media market.
Harvey Harrison, ceo/co-founder, Catalyst Agency:
This move continues the consolidation of media ownership in fewer and fewer entities thus squashing competition and innovation. This means fewer and fewer opportunities in the major media so that independents will need to resort to new and fresh ways to reach an audience such as online. For example, see www.homestarrunner.com and www.maddox.xmission.com as two examples of some splendid work.
Andrew Fitzpatrick, chairman, Monster Distributes Ltd.:
Planning to stay away from the pub tonight and save my Euros for a bid for Disney. No, really, consolidation of media ownership is always bad for independent producers and distributors as it reduces outlets for programming, reduces prices and leads to increasing vertical integration with large media concerns wanting to own the content they broadcast.
While today's decision by the FCC to update its media ownership rules is a first step in the right direction, we have much further to go before there is a level playing field between free TV and pay TV.
Ian Dawson, exec producer at Steele VFX: