Wednesday, November 28, 2007

Martin's Tunnel Vision for Big Media

FCC Chairman Kevin Martin is one shrewd operator. When it comes to media policy, this Bush-appointed bureaucrat will do whatever it takes to get it done his way. Unfortunately, Martin's way has nothing to do with his sworn duty to serve the public -- or pay attention to the facts.

It's more about his unyielding drive to allow the nations most powerful companies media conglomerates -- including Rupert Murdoch's News Corp and Sam Zell's Tribune Company -- to swallow up more of our local news outlets.

The Public's Last Stand?

His goal: lifting the longstanding "cross-ownership" ban that keeps one company from owning both the daily newspaper and radio or television stations in the same town. Martin is now attempting to jam through these radical rule changes to meet a self-imposed December deadline.

Why Martin is doing this is the subject of considerable speculation. It's certainly not because the public wants Big Media to gain control of more local news.

Damn the Public. Full Speed Ahead

Earlier this month the FCC convened the final of six public hearings to air out concerns about this proposed rule change. I have watched, listened to or attended all of these hearings and one thing is clear. The public is single-mindedly opposed to more media consolidation.

Martin himself admitted recently that he remembers "only one" public witness calling for relaxation of media ownership rules at these hearings.

This public opposition is not just evident in the passion of the thousands of people who testified against consolidation at FCC hearings in Seattle, Los Angeles, Nashville, Tampa, Harrisburg and Chicago. It's a fact reflected in the public record.

The last time the FCC tried to change the rules in 2003, millions of people contacted Congress and the FCC to oppose the changes, which were ultimately thrown out by the courts. My organization, Free Press, checked the public comments of those who have written the FCC since June 2006 and found that more than 99 percent opposed changing the rules.

Despite the massive outcry, Martin has not wavered in his rush to let loose a new wave of consolidation by the end of the year.

Damn the Evidence. Full Speed Ahead.

So, why does Martin remain determined to turn a blind eye to the public?

Stopping Big Media

It's not because the evidence suggests otherwise. On Nov. 13, Martin penned an op-ed in the New York Times, in which he argued that a "relatively minor loosening of the ban on cross-ownership of newspapers and TV stations," would help save the American newspaper from certain death.

In a new report released on Monday, Free Press found that Martin's claim that the newspaper is an "endangered species" is greatly exaggerated.

Consider this: Revenue per circulated newspaper copy increased from 2005 to 2006. Industry-wide, newspapers still enjoy operating profit margins near or above 20 percent -- higher than the S&P 500 average.

Recent mergers and acquisitions further demonstrate that newspapers remain highly valued properties. Prices paid for newspaper companies have been above 10 times cash flow, with average stock prices at eight times cash flow. These values are considered quite healthy by financial industry standards.

Damn Local Control. Full Speed Ahead.

There's more. Martin's FCC has claimed that cross-owned stations do more local news, but we found using the FCC's own data that markets with cross-owned stations produce fewer total minutes of local news.

Higher levels of local ownership lead to more local news at the market level, while increasing market concentration decreases the production of local news.

Martin is not unaware of this. The evidence was filed in the official FCC docket and presented to him by Free Press Research Director Derek Turner during an Oct. 31 localism hearing in Washington, D.C.

That's not all. In making his case for consolidation, Martin claims that the Internet has wrought considerable changes to the media marketplace. The stripping away of cross-ownership rules is essential to the survival of newspapers and broadcasters, he concludes.

This simply isn't true.

Only a small percentage of the public uses the Internet as their primary source for local news, and those that do are visiting the Web sites of their local broadcasters and newspapers. The Newspaper Association of America found that nearly 60 million Americans visited local newspaper Web sites during the second quarter of 2007 -- and that newspapers online readership has grown five-fold since 2000.

The challenge for newspapers is not to rewrite rules that would allow them to merge their newsrooms with those of local TV and radio stations. It's to figure out new and inventive ways to capitalize on the remarkable increase in online traffic to their sites.

Damn Diversity. Full Speed Ahead.

If that wasn't enough, there's a real bombshell in all of this. It's the FCC's charge to ensure diversity in media. But Martin's proposed new rules would make the glaring lack of diversity in media even worse.

Again, the evidence speaks for itself. According to a Free Press study from October 2006, people of color - representing a third of the nation's population -- own little more than 3 percent of commercial TV stations in the country.

What's worse, an updated analysis released today suggests that the future of minority TV station ownership is in jeopardy. From October 2006 to October 2007, African-American TV station ownership dropped by 60 percent -- falling from 19 stations to eight stations in just a single year.

The situation has become so precarious that Democratic FCC Commissioner Michael Copps called it a "national disgrace."

The real disgrace though is Martin's efforts to spawn further consolidation without addressing the lack of diversity with policies that foster more -- not fewer -- minority voices in the media.

Replacing Martin's own Rhetoric with Reality

Martin Accuses Others of Rhetoric

So there you have it. Overwhelming public passion agrees with the empirical data.

Can you think of any other policy issue where the evidence falls into such neat alignment with public opinion? The only thing standing in the way is one powerful man who has determined to ignore the facts and write another blank check to Big Media.

During the FCC's final public hearing in Seattle, Martin labeled as "rhetoric" the many speeches by those opposing media consolidation. But isn't rhetoric the final refuge of those who can't marshal facts to make their argument?

Above it all is the need to revitalize our media system in service of better democracy. The ideals of an open and free press that once set our nation apart from the rest have been ransacked for too long by corporate profiteers and fawning bureaucrats.

No matter what your political beliefs, bringing more diversity of ownership and local control to our media would help boost our ability to engage in the issues of our time.

That should seem obvious to everyone. The real challenge is to make public officials like Kevin Martin more accountable to the Americans he's supposed to serve.

Wednesday, November 21, 2007

Suckered By Astroturf

USA Today joins the illustrious list of news organizations to be taken for a ride by Astroturf.

In an article earlier this week, the paper's media beat reporter David Lieberman writes that the end of the Internet is nigh. It will start crashing down around us by the year 2010, he adds, citing a recent "study" by Nemertes Research.

Fake Grass Roots

The Not-So-Real Thing

The reason for our demise? We dastardly Net users have gone too far. According to Nemertes, we're not just sending email and surfing Web sites but also downloading and uploading data rich files like video and music. Net Neutrality would further unleash this unruly mass upon the Internet grinding the network to a halt.

"The Web will start to seem pokey," Lieberman writes, "as use of interactive and video-intensive services overwhelms local cable, phone and wireless Internet providers."

Saving Us from Ourselves

The underlying message is this: By taking control of our own media, users are straining the Net to the limit. The only way to save the Internet from the coming "exaflood," the report concludes, is to pay more federal money to the likes of AT&T and let them gut Net Neutrality protections so they can fix the problem.

The real problem here isn't the looming demise of the Internet, but USA Today's failure to question the motivations of its sources.

In their ceaseless efforts to become the gatekeepers to what we do online, the phone and cable companies funnel money to unscrupulous think tanks, which, in turn, churn out research, painting a picture of Internet Armageddon that can only be averted by giving the telcos exactly what they want: more money and control.

The Roots of Astroturf

In this case, Lieberman might have told readers that Nemertes is a wind-up research group funded by the Internet Innovation Alliance, an "Astrtoturf" group underwritten by AT&T.

"The IIA has been pushing the idea of a looming 'exaflood' for some time, with the primary goal being industry deregulation," writes Karl at Broadband Reports. "The argument being that if these companies don't get exactly what they want from lawmakers in Washington, the entire Internet collapses and we're back to using soup cans and string."

The USA Today story leaves readers with the impression that Nemertes reached its conclusion for the good of the public interest and not simply by following a script that was pre-ordained by the telcos.

Digging Beneath the Surface

Lieberman might have cited the several other reports and studies that claim the opposite.

Analysts at the D.C.-based market research firm TeleGeography, call "foolhardy" the idea that an exaflood "is going to break something or kill something." Video traffic and demand growth have been accounted for, he told CIO Insight, and “the network operators know how to scale.” TeleGeography research shows average global utilization of core Internet capacity in mid-2006 was only 34 percent, with peak utilization of 47 percent of available capacity.

Greg Collins, director of network and data center engineering for Earthlink Inc., added, "I don’t see anything specific in the way of capacity problems today, and my job is to manage capacity and growth in our network."

Recent research notes that investment in backbone upgrades is exploding, with just about every network operator already working on upgrades or planning to do so in the next year or so.

Recent figures from Infonetics Research find that telecom global capital expenditure will exceed $220 billion in 2007. "Carriers are obviously not short of money, but rather than spend it on new infrastructure, many are looking at less capital-intensive strategies to reduce the strain, such as bandwidth shaping," writes Dave Bailey of ITWeek. "This is carrier-speak for putting the brakes on your broadband connection, which is unlikely to go down well with most customers."

Michael Masnik of Techdirt sums it up: "If there's real demand for more capacity, there will be business models to support it, whether or not network neutrality is in place."

Duped and Duplicitous

These types of studies often boil down to pure posturing and polemic against Net Neutrality, bought and paid for by AT&T. When researchers stumble across inconvenient points, such as the current boom in infrastructure investment, they dismiss them in favor of doomsday scenarios and call for an end to the one rule that allows online users to innovate without permission.

USA Today is not alone. Reporters and editors from the New York Times, Forbes and the Wall Street Journal to Xinhua have been snared in Astroturf , taking at face value data from coin-operated research groups without digging into their bank accounts to sniff out the payola.

Journalists should know better. These corporations claim that lawmakers should grant them control of Internet to safeguard the best interests of all Americans. But since when was AT&T elected to determine what is best for us?