Media Concentration

 

Federal Communications Commission (FCC)

Supposedly regulates on behalf of the citizenry

–Public airwaves

•A condition of licensing is that the station operate in the public interest

Communications Act of 1934 created the FCC and mandated that it promote:

–Localism

–Diversity

–Competition

 

FCC limited number of stations a company could own and the markets in which they could operate

• In 1980s rules were relaxed
• The Telecommunications Act of 1996 further relaxed the limits
• The 2003 rules enacted by the FCC relaxed even further - ultimately abandoned

 

Largely due to the Act of 1996, the media industry has achieved a high degree of concentration

Concentration is self-reinforcing in that it raises barriers to entry in a market

Mergers - Vehicles of Concentration & Growth:

• Horizontal merger – one company buys another company of the same type
• Vertical merger – one company buys suppliers or distributors to control both the production and distribution
• Conglomerate merger – company buys a combination of other companies and/or companies in a completely different market

Media industry owned and controlled by fewer and fewer multinational conglomerates

• In 1982, The Media Monopoly estimated the major media in the US to be controlled by 50 corporations
• In 1993 estimated 20
• In 2000 estimated 6
• The 2004 edition, The New Media Monopoly, 5

 

Results of Concentration