Even while the Securities & Exchange Commission is trying to get the excesses of the market under control, another government agency could be opening the door to another kind of excess. The Federal Communications Commission announced on June 17 that it was starting a consolidated review of all the rules limiting how many radio stations, newspapers, and TV stations a single company can own, both nationally and in a single market.
This review is likely to lead to a dramatic deregulation of ownership restrictions. FCC Chairman Michael K. Powell favors relaxing limits on the ability of separate industries, such as broadcast and cable, to merge. In addition, he opposes limits on the size of media companies. Meanwhile, a federal appeals court in February ruled that the FCC had to review or eliminate some longstanding rules limiting ownership.
Powell argues that technological advances, including the Internet and cable TV, have created a multiplicity of new ways for Americans to get news and entertainment. That makes existing limits on ownership less essential.
But while that argument makes sense in theory, in practice full-scale deregulation--which would likely lead to concentration in the media--would be a bad idea. Without rules, there will be a merger free-for-all in the media business. Companies that own big broadcast networks, such as Viacom Inc. (VIA ) and Walt Disney Co. (DIS ), could buy up more local TV stations. Cable companies would combine with networks. Newspaper companies would buy local TV stations in their cities.
The result will be that the number of independent media voices would quickly diminish. Moreover, the troubles in the financial markets could mean that it will be harder than ever to raise the money necessary to start up competing media outlets.
Powell needs to focus on the value of maintaining diverse points of view in an information economy. One of the central pillars of America's democracy and market economy is an independent media with multiple voices. That's not something to be tampered with.