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Wayne Crews, A Defense of Media Monopoly, Communications Lawyer, American Bar Association, Fall 2003. pp. 13-17.

Wayne Crews, A Defense of Media Monopoly, Communications Lawyer, American Bar Association, Fall 2003. pp. 13-17.

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A case for separation of state and speech. Information cannot be monopolized in our free society except by government censorship. Airwaves are not properly "public resources," and today, not yesterday, is the true age of media diversity.
A case for separation of state and speech. Information cannot be monopolized in our free society except by government censorship. Airwaves are not properly "public resources," and today, not yesterday, is the true age of media diversity.

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Categories:Types, Business/Law
Published by: Clyde Wayne Crews Jr. on Sep 05, 2013
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Fall 2003
Communications Lawyer
Despite the Internet revolution, old-economy big media goliaths like Foxand Clear Channel and the hybrids of the old and new economies, such asAOL/Time Warner, continue theirmarch across America’s telecommuni-cations landscape.
Such companiesseek to consolidate and otherwise
expand their reach, stirring up concernsabout the implications for free speechand diversity of ideas.
Two develop-ments, the recent stream of completedor proposed media and telecommunica-tions mergers
and the June 2003 con-troversial relaxation of FederalCommunications Commission (FCC)media ownership regulations, havebrought the issue to the forefront.The FCC has been forced to grapplewith media ownership issues due tocourt-ordered reviews of certain outdat-ed ownership restrictions.
In June2003, after its most recent review, theFCC voted to relax some of these rulesslightly,
including the prohibitionagainst a broadcast company from own-ing stations that reach more than 35percent of the public. The FCC voted toallow a market reach of 45 percent.Other restrictions on the FCC agendainclude those on local TV station own-ership, radio/TV cross-ownership,newspaper/broadcast cross-ownership,and restrictions on local radio owner-ship.
The FCC also removed a restric-tion on cross-ownership of TV stationsand newspapers in a given market.
The uproar was instantaneous andoverwhelming. Protests erupted fromevery quarter, with seemingly universalagreement that media are too large, outof control, and monolithic.
The rheto-ric is often contradictory: the media aretoo liberal or too conservative, too cen-sored or too libertine, too something-or-other. Such groups as the ConsumersUnion and the Media Access Project joined ranks with organizations on theopposite side of the spectrum, such asthe Family Research Council and theNational Rifle Association, to opposederegulation and support governmentregulation of media ownership.
Theemergence of a motley coalition of anti-thetically opposed groups is revealing.When allof these different groups takeissue with the media, the necessaryimplication is that overall media offer-ings are—well, diverse.Nonetheless, Congress is now deeplyimmersed in an energetic campaign towrestle media giants to the ground byopposing the FCC’s proposed changes.Similarly, court challenges are under wayto gut much of the FCC’s limitedattempts at deregulation.Despite claims about the death of diversity, localism, democracy, and polit-ical participation through control in thehands of a few, proponents of mandatoryownership rules in fact advocate theirown versions of media control and, ulti-mately, control of content and informa-tion. Thus, ironically, the groups favor-ing diversity are united in their rejectionof consumer sovereignty in the market-place and in favor of a real monopoly—government control.What a waste of human energy, tal-ent, time, and innovation. Ideas cannever truly be bottled up by big mediain a free society, but people have plentyto fear from an overweening govern-ment that believes it acceptable forpoliticians and bureaucrats to block orcontrol media voices—even if they hap-pen to be the big ones. Fundamentally,only government action, not big mediaoutlets, can obstruct citizens’ access toinformation. An outrageous example of the former is China’s current and large-ly unsuccessful attempt at centralizedInternet control and censorship, whichimposes considerable economic costsand has drawn the deserved attention of human rights activists.
Information Cannot Be Monopolized
The most frequent justification offeredfor restricting media ownership is toprevent monopolization of viewpointsexpressed in the media, i.e., to protectdiversity in ideas.
But the media aremerely conduits for information of every sort, and information cannot bemonopolized where the governmentdoes not practice censorship. The mediaare an implementation of free speech,not its enemy. Although this article isnot the venue for a treatise on the folliesof antitrust law over the past century(that has of late found potential monop-olies in pickles,
intense mints,
andpremium ice cream
), let it at least beoffered for consideration that there isno such phenomenon as a mediamonopoly unanswerable to the rest of society, and to the economy potentiallyarrayed against the media, if it were toabuse its station in society.Absent government censorship, thereis no fundamental scarcity of informa-tion. More information can always becreated, and in a free society, nobodycan silence anybody else. The most thatbig media can do is refuse to share theirmegaphones and soapboxes, which isnot a violation of anyone’s rights. Realsuppression requires governmental cen-sorship, or the actual prohibition of theairing of alternative views.Ironically, opponents of deregulationfeel entitled to commandeer someoneelse’s resources, to limit the size of someone else’s soapbox. This action isthe true violation of free speech andshould concern the public. This effectiveconstraint imposed upon another’s prop-erty is regarded as acceptable, however,and even laudatory, as long as it is called
A Defense of Media Monopoly
Wayne Crews (wcrews@cato.org) is thedirector of technology studies at the Cato Institute in Washington, D.C. He is theauthor of the Cato Institute’s annualreport,
Ten Thousand Commandments:An Annual Snapshot of the FederalRegulatory State.
 He is also co-editor o
Copy Fights: The Future of IntellectualProperty in the Information Age
(2002),co-author of 
What’s Yours Is Mine: OpenAccess and the Rise of InfrastructureSocialism
(2003), and a contributor to
The Half-Life of Policy Rationales: HowNew Technology Affects Old PolicyIssues
(N.Y. Univ.Press 2003).
Communications Lawyer
Fall 2003
a “media ownership rule” and has thesupport of enough politicians.It is extraordinarily difficult to createor maintain such a thing as a monopolyon information. This fact is rarely con-fronted, however. Rather, the chargeof monopolization is used as an epithet,a hurled accusation, or a full-page adwith an unflattering picture of RupertMurdoch, titled “This Man Wants toControl the News in America.”
Thereality, however, is that would-bemonopolists of information would needa stranglehold on both infrastructure andcontent. That is, they would need tomonopolize the hardware of both thewired or wireless networks of today andof those yet to be—along with the infor-mation that travels across them. Thisextraordinary situation does not existand is highly unlikely in a free society.Media companies do not function in amarket vacuum and cannot escape hos-tile competition. Media is a business,with upstream and downstream threatsand pressures—disgruntled customers,programmers of content, authors, artists,advertisers, and hostile takeovers.Celebrities bolt. Sports leagues move tonew networks. If reporters feel undueinfluence, they rebel and leave. They caneven separate and form a separate news-paper, or join a competitor.In grappling with the principle thatinformation is not subject to scarcityand cannot be monopolized, it isinstructive to contemplate the imagi-nary worst-case scenario of those whowould regulate media ownership. Nevermind that AOL/Time Warner hasrecently decided to ditch the AOL fromits corporate name, due to disappoint-ment with the venture. Instead, imaginethat an insatiable AOL/Time Warnercontrolled every cable line in America.Then imagine that AOL/Time Warnerwere to proclaim that communism isthe path to social justice, that the earthis flat and the center of the universe,and that the moon is made of greencheese. What then? Under the institu-tion of a free press, Wall Street wouldsimply fund new media companies toreplace Time Warner or to competeagainst it. Advertisers, venture capitalists,programmers, disgruntled reporters, andconsumers would flee to the new enter-prise, taking their funding, talent, andattention with them. In short, the limita-tions imposed by the mobility of capitalapply to unruly media.
Today, Not Yesterday, Is theAge of Media Diversity
If ever a justification existed for mediaownership restrictions, the circumstances justifying those restrictions no longerexist. Media ownership rules were largelydevised during the middle of the twentiethcentury, from the 1940s tothe 1970s, when thebroadcast landscape, bothnationally and locally, wasdrastically different.
They emerged before theadvent of thousand-chan-nel cable television, satel-lite TV and radio, and, of course, the Internet and itsbroadcast capabilities of personal and organizational webpages,mailing lists, e-mail, weblogging, andpeer-to-peer communications.Channels provide 24x7 news, science,music, home improvement, weather,food, and sports programs; even individ-ual sports like racing (SpeedVision)areavailable. The rise of mass media com-panies means that we no longer had towait until Christmas to watch
 It’s aWonderful Life
and allows Viacom’sNickelodeon to offer endless reruns of old shows. The full potential of satel-lite, Internet, and unused spectrum hasbeen barely touched. Niche markets of the future will make possible self-creat-ed stations covering ever more obscuretopics, such as a personalized fieldhockey channel on a continuous basis.
Future broadband infrastructure ventureslike fiber to the home could expand ouroptions still further.The dominance of Walter Cronkiteand the Big Three networks has disap-peared; today, not yesterday, is the age of diversity.Elvis may have left the build-ing, but Matt Drudge is in the house.
Freedom of Speech, or Else
The notion of restricting media owner-ship is contrary to the concept of democracy. Perhaps some future histo-rian or New Age logician will be ableto reconcile the claim to supportdemocracy and choice, while simulta-neously supporting centralized govern-mental control of the size and structureof private media outlets. From thestandpoint of liberty, however, the twotenets are not reconcilable.Without the FCC’s recent rule change,it remains against U.S. law for a broadcastnetwork owner to speak to 65 percent of the public via its stations.
Rather, eachremains limited to a maximum audienceof 35 percent of the viewing public.Despite this explicit regulatory limitation,the advocates of free speech do not con-demn this violation of the core principleof free speech, but want to keep therestrictions in place. Some, like CBS,NBC, and Fox, are already at the cap andwill not be able to expand.Big is not always bad, even when capsare breached. The FCC provides waiversto its rules for special circumstances, suchas when a newspaper or broadcaster isabout to go out of business.
Theseexceptions are a tacit admission that scalecan affect dissemination of speech in apositive way. The logical conclusion isthat, if companies are not free to grow,they may be forced to fold (particularly inthe smaller markets of the country), leav-ing consumers even fewer viewpointsfrom which to choose. We should notencourage a regime where waivers arespecial favors; all should be free toexpand as market circumstances propelthem. Pandering to politicians for permis-sion to expand one’s business is some-thing, but it is not free speech.Regulating media mergers is a viola-tion of free speech, to say nothing of badantitrust and communications policy.Such regulation is a needless and counter-productive declaration that people do notget to speak if their microphones are toobig—a situation that will be remedied, if necessary, in the unforgiving market-place of ideas. Of course, not everyonemay like the end results of some collec-tive market decisions, but ours isincreasingly an age of “narrowcasting”rather than broadcasting, leaving lessand less room to complain. Already themarket preserves the old and valuedwhile offering the new.With regard tonews (as opposed to entertainment),markets are surely capable of providingunbiased and unfiltered information, asdemonstrated by C-SPAN.
Media ownership rules emergedbefore the advent of thousand-channelcable television, satellite TV andradio, and the Internet.
Fall 2003
Communications Lawyer
Media monopoly is not a valid threatto free speech or democratic values ina free society, and the scale and thescope of private media organizationsare not appropriate targets of coercivepublic policy. Citizens remain foreverfree to establish new media outlets,and investors remain free to fund them.More emphatically, far from a threat tofree speech, media consolidation is butone exercise of that freedom. Radio sta-tion owners have a right to boycott theDixie Chicks.
If it is a dumb decision,it will not (and it did not) stick.
Onlygovernments can censor or prohibit freespeech (or the emergence and fundingof alternative views), and it is preciselysuch censorship that government engagesin by establishing ownership rules.Government restrictions on ownershipare themselves censorship, and a coerciveimpediment to speech and a threat todemocracy and wide scale expression.No gaggle of politicians should everthreaten network owners over their legiti-mate, private, business decisions. Thatcan be left to the marketplace.The arguments against big mediafail because they rest on the notion thatcapitalism and freedom are inimical tocivil society and the diffusion of ideasand information, when they are, in fact,the prerequisites to such values. Wecherish a free press, dissent, and debatebecause only governments can threatenthese values. Free markets are requiredto maximize output, including that of true and useful information, the rawmaterials of democracy.No case canbe made that we acquire and safeguarddiversity, independence of voice, anddemocracy via government control of the microphone. Those values springnot from government coercion but froma separation between government andmedia. Just as religious freedom doesnot depend upon government control-ling the reach of any faith, informationdiversity will flourish without the FCC.Our government should not controlwho can own a printing press, or howmany television stations or newspapersone entity can own, or the viewpointsof those outlets. Ownership rules needto be abolished, not merely relaxed.Citizens need not fear media monopoly;rather, every media mogul must live infear of the power of consumer choiceand the tyranny of the remote control orthe angry country music fan. Long livethe Dixie Chicks.
So Who Is the Greedy One?
The inclination of some academics andpublic servants to despise the commer-cial Internet and media grows tiresome.Not only do these critics often occupy astance that is parasitic of the commercethey denounce—the nonprofit sectordepends upon the private sector’s suc-cess, after all—but their notion of freespeech perversely enshrines a political,rather than civil, view of communica-tions and social interactions. Once thebromides of diversity, localism, anddemocracy are pierced, the proponentsof ownership rules advocate govern-ment control of the flow of information.They hold a viewpoint that they wantgovernment to foster by manipulatingthe institutions of the free marketplace.Some anticorporate advocates of so-called diversity and government controlare getting a bit greedyin terms of newmedia development.Noncommercial interestsalready dominate the.org and .edu Internetdomains, where nonprof-it associations and col-leges and universitieslargely reside. There was even a move-ment to ensure that noncommercialinterests be represented in the .usdomain.
Governmental information iswidely available, given that an entiretop-level domain, .gov, is devoted tothe goings-on of the federal govern-ment, and not subject to capture byprivate media.
Media Access RulesHarm All the Players
All media ownership constraints shouldbe abolished, not merely to allow bigmedia to concentrate, but also to pre-serve a marketplace in which upstartscan serve national and local marketsunimpeded. If Viacom, Disney, andAOL are prevented from reaching half the country thanks to limitation rules,then so are others. If one’s concern isdiversity of voices, rules that deliber-ately hamper incumbents cannot helpbut also impede potential competitorsthat might otherwise have seen clear tomounting a profitable challenge. Thus,ownership restrictions apply to poten-tial new voices as well—and make theiremergence less likely. The prospect of a large audience can be critical to anupstart’s decision to establish a newnetwork. The existence of many largevoices can leave room for and evengenerate new demand for boutiquevoices. That is, a wealthy world withHome Depot can also be a world withroom for Restoration Hardware, HGTV,and Bed, Bath and Beyond—to saynothing of thousands of sole propri-etors. Rule relaxation can increase totalwealth and options and even the oppor-tunities for local control. If the possibil-ity of a national reach is squelched,other opportunities also suffer.
The Case Against Localism
Another argument frequently offered byadvocates of restrictions on media own-ership is protection of local interests.
However, people were arguably con-strained, not liberated, by locality, if today is compared to the era of WalterCronkite and local newspapers. Thedemise of local programming may notalways be inherently bad, especiallyif the local news is lousy, stilted, andprejudiced. In theory, the existenceof 
USA Today
does not necessarily con-tradict or threaten the church bulletin;yet people may, and often do, prefernational news. National news hashelped spur an open society and addedto opportunity, not subtracted, becausenational media often give a broad voiceto local stories that resonate. Withtoday’s online news, the scale is inter-national and benefits people across theglobe. Under the institution of a freepress, the national/local dichotomy doesnot exist. Consumers decide what isimportant—be it local or foreign—andentrepreneurs cater to them.In many instances, the decline of local media simply reflects the workingsof the economic principle of comparativeadvantage, which can apply to mediagoods as well as to ordinary goods. It isoften cheaper to consolidate newsgather-ing, and it may not make sense to do allreporting at the local level. Even so, localresources are quite powerful; after all, thelocal advertisers (and their customers)control the programming.
Ownership rules need to beabolished, not merely relaxed.

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