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Local media magnates will join activists at an FCC hearing to oppose deregulation

Look who's standing up to big media 

Local media magnates will join activists at an FCC hearing to oppose deregulation

This summer, leaders in Washington will make a decision that will affect everything you see, hear and read. You probably haven't heard about it--most Americans haven't. But on Monday, you have the chance to speak directly to those leaders about what this decision means to American media and to our democracy.

The Federal Communications Commission, the government agency that regulates the broadcasting industry, is considering proposals from the major media companies to relax or even scrap current rules that limit the number of radio and television stations a single company can own in a given market. Also on the table, awaiting the hatchet, is a rule that prohibits a company that owns a TV station from also owning a newspaper in the same market. If that were approved, there could be many cities in America served by just one newsroom.

According to a study by the Pew Foundation's Project for Excellence in Journalism, 72 percent of Americans haven't heard about the upcoming FCC decision. (Archive searches of The News & Observer and the Durham Herald-Sun found no mention of the upcoming hearings at Duke.) When asked if relaxing the rules on media ownership would be likely to have a positive or negative impact on the community, 34 percent thought it would be negative, and 46 percent thought it wouldn't make much difference.

But FCC Commissioner Michael Copps insists otherwise. "This is the biggest decision the FCC will make this year, and it will affect your television, radio, newspapers, cable TV, and Internet news and entertainment for years to come," he said in a public statement. "This is the Triangle community's only opportunity to speak directly to the decision makers. I hope everyone concerned will come make their voices heard."

Duke will host one of only a handful of FCC hearings on the topic. Copps, fellow Commissioner Jonathan Adelstein and their staff have organized the hearings on a shoestring budget over the objection of FCC Chairman Michael Powell, who has said that he doesn't think they're necessary, since anyone can file public comments by mail or online.

A hearing earlier this month at the University of Washington in Seattle drew some 400 people, thanks to promotion done by Reclaim the Media, an activist group based there. Local activists have been networking with that group to draw an audience here as well, and a bus is being arranged to take people from Internationalist Books in Chapel Hill to the Duke Law School.

Monday afternoon's hearings will include panels on localism and community standards, localism and news, and minority ownership and diversity. U.S. Reps. David Price (D-Chapel Hill) and Richard Burr (R-Winston-Salem) will be there, as will local media magnates Jim Goodmon, owner of Capitol Broadcasting, and Hank Price, general manager of the Greensboro NBC/PAX affiliate station WXII-TV 12.

Local radio oligopoly
Back in 1996, Congress and the FCC decided to do away with many of the rules regarding media ownership. What's the effect?

Arbitron released a survey in February that bolstered further deregulation. It said about 79 percent of listeners were "very pleased" with radio programming and felt they had as many or more choices available as they did five years ago. Arbitron is the media and marketing research firm that provides ratings to the radio industry and effectively compiles song playlists to most commercial radio stations through market test response of target age groups to particular songs.

But the industry's own hard data reveal something else. According to a study by the Future of Music Coalition, a Washington-based musician advocacy group that has vocally opposed the relaxation of ownership rules, there has been dramatic change for the worse. The study released last November found a loss of localism, less competition, fewer viewpoints and less diversity in programming, with virtually every music format controlled by an "oligopoly" of four or fewer companies across the country. Using data from the BIA Financial Network (an investment banking firm that serves broadcasters), the group analyzed the Triangle radio market and found it even worse than the national average. Here, there are a total of 46 stations and 24 owners, generating approximately $77.8 million in sales revenue each year. Four broadcasters--Curtis Media Group, Clear Channel, Radio One, and Capitol Broadcasting--control 95.5 percent of the listenership (nearly 2 million people) and 96.4 percent of the total sales revenue.

Radio has arguably felt the strongest impact from the 1996 deregulation. Limited bandwidth is the major reason, since the expansion of cable has helped to diversify the programming (if not the sources of the programming) available on TV. There are only so many spots on the radio dial.

That's exactly why Jim Heavner opposes the proposals to do away with ownership caps. "I believe that the public's interests are best served if all broadcasting media were owned by the people who lived in the city of license, if these licenses are finite."

Pro-business, anti-consolidation
Heavner's company, VilCom, was once a small media powerhouse in its own right. Over the years, it acquired about 30 radio stations. It has sold off all but one, WCHL 1390 AM, but VilCom still has various other holdings, such as the lucrative University Directories, which publishes phone books at 100 colleges. "I'm a business person and will generally defend the efficacy of the free enterprise system as the best way for us to advance free societies," Heavner said in an interview at his office. The view looks out onto the VilCom campus, with shiny new office buildings that make up the company's commercial real estate division. Heavner is a dyed in the wool Tar Heel fan who takes pride in the fact that he wields a great deal of influence in Chapel Hill. Even the curtains in his office are Carolina blue.

An unapologetic businessman, Heavner insists that this is not about the virtue or vice of the corporations that are eager to buy up stations and plug them into a profit-making business. He explained how the business operates, and why community interests sometimes get lost. "The home office flies into town, meets with the manager and says 'How are we going to make our sales goals? How are we going to improve our profitability so we can be successful?' There's nothing wrong with that. But when it comes to broadcasting, the communities are not as well served."

During the ice storm this winter, WCHL kept its announcers on the air with constant updates on power outages, roads, school closings, even which shops and restaurants were open. This sort of response to a local emergency is one of the things Heavner says the radio industry is losing as a result of consolidation. "When stations are bundled and operated out of a single place, it is very efficient to have most of those operations be so totally automated that they don't even have announcers. It's a very common thing now for the DJ you hear on your local radio station to be someone who doesn't even live there. He may live a thousand miles away, and he's done what the announcers call 'the drops.' There's the perception that Charlie the announcer works from 9 to noon, because you hear his voice from 9 to noon each day. That's a useful illusion, but Charlie may very well be in Indianapolis, and he has probably recorded all of those drops in about a half-hour, and he emails them in. So it's enormously profitable. Now, when you have an emergency and they say, 'Why doesn't Charlie get on the air and tell us about the ice storm?' that's because Charlie is in Indianapolis and it's not his job.

"It's a different operation. It's as different as your saying, 'Why didn't my CD player stop playing music and start telling me where I could buy firewood?' These radio stations are no longer that kind of service," Heavner said. "You lose the sense of community."

Heavner has made a nice profit off of media consolidation, selling at least two of his stations to Clear Channel, the largest radio conglomerate in the country. "One of the reasons we sold our radio stations when we did was that the prices were driven up by the deregulation. I don't believe this story is about guilt or innocence, but if it is, I was guilty of succumbing to the very same organizational self-interest that kept us from focusing on why we had WCHL in the first place. We had 12 companies; WCHL was the smallest by a lot. We had trouble keeping managers at WCHL because they were captivated by what they believed was the greater opportunity in our larger companies." With high turnover and a lack of interest in the little AM station, Heavner said he decided that Raleigh-based Curtis Media might do a better job with it. But a few years later, after Curtis acquired many more stations, WCHL was again the runt of the litter. It was based in Durham and playing a music-only format.

Then last November, Heavner did something very unusual: He bought the station back. Today, WCHL is still licensed to Curtis but is operated by VilCom and is its only broadcast property. It's returned to a talk/news format, with a mix of local programming, sports (gotta carry those Heels games) and CBS radio news. "What we're doing over here is not efficient, but it is effective," Heavner said. "I would hope that it could be sufficiently successful for the long term that others will find it viable, or that others would have the belief that they might be able to do it in their hometowns, to be able to go back to local ownership."

"It would be interesting to go back and look at what the FCC's mandate is," Heavner said. "If public interest is part of its mandate, there is no way the public interest is served by further homogenizing and further deregulating the industry."

Diversity of ideas
Heavner isn't the only local media owner taking that stand. Jim Goodmon is the third generation of his family to run Capitol Broadcasting Company, which his grandfather founded in 1939. The company owns five TV stations in North Carolina, including WRAL and Fox 50, and radio station WRAL-FM. Goodmon is a businessman, not an activist. He's also a Republican. And on Monday, he's going to tell the FCC how strongly he opposes further deregulation of broadcasting.

"This proposal is bad," he said in a recent phone interview. "It seems to me so fundamental in terms of ownership, diversity of speech, diversity of ideas. I can't come up with any reason that companies should own more and more stations. I can't think of one good thing out of that."

What worries him most is a removal of the 35 percent cap on national television ownership. Right now WRAL competes with two network-owned and operated stations in our TV market. "I think we've got a good mix," he said. But with that cap lifted, the balance could shift such that it would be harder to stay in the game. For one thing, it's already difficult for smaller companies like CBC to buy syndicated programming.

"We should have as many different owners of broadcast stations as possible, and it doesn't make any sense to let few people own more stations." Stations owned by large corporations are inherently less connected to the community, he says. "The programming on all those stations is determined in one place. There's no local programming decision-making." The goal of broadcasting should be the opposite, Goodman says. "Ownership should be as close to the market as possible--actually I think we should have local ownership," Goodmon says. "Diversity is the word." Though he admits that the financial pressures are real, Goodmon says this is not a financial issue, it's an issue of democracy. "That's what America is about, as many different voices as possible."

Goodmon is also concerned about the proposal to allow the same company to own both a newspaper and a TV station in a given market. "You can do partnerships with newspapers without them owning the station." WRAL already has a partnership arrangement with The N&O. It features the paper's reporters on evening newscasts and on a weekly public affairs show. This partnership trend (called "convergence" in the industry) is becoming so common nationally that some journalism schools are training their students for it. "Don't you think that the local newspaper is a very powerful voice in the community?" Goodmon asked. "Why do you want them to own a television station?"

While the McClatchy company owns 22 newspapers, it doesn't own any broadcast outlets. Elaine Ludscom, a spokesperson for the company, said she couldn't comment on acquisition plans but did say that buying a local TV station "would not be something we would rush to do." But McClatchy is a relatively small newspaper chain. Gannett, by contrast, owns 94 daily newspapers and 22 television stations. What would happen if Gannet jumped into the Triangle media market?

"Whatever you think about the level of television news, within television WRAL has a superb reputation for local connection and attention to the local issues," said Ferrel Guillory, director of the Program on Southern Politics, Media & Public Life at UNC-CH. When Guillory's group used a Pew Foundation grant to promote coverage of local political candidates, he says WRAL "took the lead" by setting aside the last two to three minutes of the evening newscast as free airtime for political candidates. "Goodmon as a local owner is interested in local and state issues," Guillory said. "He really stepped out nationally to do that, to show that there was a way for local stations to offer candidates a way to appeal to voters in something more than a sound-byte."

Growing up in the South, Guillory remembers the locally owned newspapers in which "coverage of city hall and the state house was the meat and potatoes." Things have changed dramatically since then. "Because most of our newspapers are owned by chains, even if the local editors are devoted to their communities, the corporate ownership introduces both financial and journalistic dynamics that have led to a diminishing of coverage of the daily march of democracy in our state capitols and our city halls. It isn't that newspapers have stopped covering state and local governments, it's that it's been subsumed" by national news.

Case in point: The News & Observer, where Guillory worked for 11 years as a reporter and editorial page editor before the paper was bought by McClatchy in 1995. "The N&O remains a strong newspaper with a better than average news hole. But yeah, it's been subject to the same journalistic changes that other American newspapers have been subject to. It still does investigative reporting, and they do a lot of reporting on the state capitol, but state capitol coverage is not the front-and-center, bread-and-butter that it was in the '60s and '70s. Just look at the 'Under the Dome' column--it's not on the front page anymore, it's not even daily anymore."

"The root issue isn't that the press is liberal or conservative," he insists. "It isn't the ideological bias. It's just the diminishing of attention."

Guillory believes lack of local coverage strikes at the heart of the media's role in a democratic society. "That's the critical role of journalism, to keep people in touch with local officials and keep public officials accountable to the voters. We can't let our democracy be guided by just a few news barons."

The buy-back of WCHL was possible because Curtis Broadcasting was owned by Heavner's good friend, Don Curtis, a guy he can make deals with over lunch. But in most American cities, there is neither the will nor the cash nor the access to buy back radio stations and turn them into local outlets. The momentum toward consolidation is nearly impossible to stop.

"I'm not sure that the biggest damage has not already been done in a way that it will be hard to undo," Heavner said. EndBlock

FCC public hearing

The Federal Communications Commission is holding a hearing on a proposal to relax media ownership restrictions Monday at 12:30 p.m. at the Duke Law School, Room 3043 (parking at the Washington Duke Inn).

If you can't attend, watch the live Webcast at: www.law.duke.edu/webcast/ or file a comment to the FCC online at: http://gullfoss2.fcc.gov/ecfs/Upload/ and click on "broadcast ownership."

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