Man Without Qualities

Monday, December 02, 2002

It's not that anybody really disagrees with the substance of what he has been saying!

New York Times columnist Paul Krugman's peculiar version of media economics seems to have prompted the Times Business Section to run a special piece disagreeing with the substance of what Professor Krugman is saying. Specifically, Professor Krugman wrote:

The F.C.C. says that the old rules are no longer necessary because the marketplace has changed. According to the official line, new media — first cable television, then the Internet — have given the public access to a diversity of news sources, eliminating the need for public guidelines.

But is this really true? Cable television has greatly expanded the range of available entertainment, but has had far less broadening effect on news coverage. There are now five major sources of TV news, rather than three, but this increase is arguably more than offset by other trends. For one thing, the influence of print news has continued its long decline; for another, all five sources of TV news are now divisions of large conglomerates — you get your news from AOLTimeWarnerGeneralElectricDisneyWestinghouseNewsCorp.

And the Internet is a fine thing for policy wonks and news junkies — anyone can now read Canadian and British newspapers, or download policy analyses from think tanks. But most people have neither the time nor the inclination. Realistically, the Net does little to reduce the influence of the big five sources.

In short, we have a situation rife with conflicts of interest. The handful of organizations that supply most people with their news have major commercial interests that inevitably tempt them to slant their coverage, and more generally to be deferential to the ruling party.

But today's prominent Business Section article (front page of that Section) squarely responds to Professor Krugman:

For decades, public interest advocates have ... summoned images of Citizen Kane, or worse, Big Brother, warning that without strict regulation a few powerful corporations could take control of political discourse while homogenizing entertainment and defanging news.

But the advocates are now facing an issue that is much more complicated because despite consolidation, media choices have expanded exponentially through technology. Now the typical American can watch Britain's BBC News, among others, on television and choose from tens of thousands of news Web sites, from Al Jazeera, based in Qatar, to The Times of India, based in New Delhi. As a result, federal regulators are questioning whether fears of corporate media domination have become obsolete.

The impact of the Internet and the expansion of cable and satellite TV will be discussed next month, as the Federal Communications Commission considers loosening ownership restrictions in what could be the largest overhaul of media regulations in a generation. ....

Opponents argue that huge leaps in the number of entertainment and information sources mask a consolidation of media ownership — and a sameness in television and radio programming — that F.C.C. leaders are choosing to ignore.

Proponents of deregulation say that the average household has access to so much information in so many different forms that no single company could ever exert undue influence over consumers. In fact, they argue, large media conglomerates like AOL Time Warner and Comcast, through their investments in cable and Internet, are helping to bring more choices than ever to the average American household.

Just such an analysis is driving the F.C.C., now under the control of Bush administration appointees.

To some, the average American home has almost too much television to watch — 89 channels by the count of Nielsen Media Research. Nearly a third of United States homes with televisions have satellite or digital cable systems that give them access to more than 200 channels.

"When I look at the trends in television over the last 20 to 50 years, I see a constant and increasing explosion in variety," said Michael Powell, the F.C.C. chairman. "In the purported golden age of television there were three networks."

Most car radio dials have access to nearly two dozen stations, according to F.C.C. data. Satellite radio systems, if they gain traction in the market, will offer far more. Meanwhile, almost two-thirds of all Americans have the Internet at home, the F.C.C. says, allowing them to peruse just about any major newspaper or magazine in the world.

The response of the public interest advocates — and some politicians — is that while the media menu has expanded, it is chosen according to the commercial interests of a handful of companies.


This dynamic has helped lead to a dearth of major networks addressing minorities or people interested in high culture or civic affairs, areas that do not promise the ratings and profit bonanzas that major media companies are seeking, said Gene Kimmelman, senior director of the Consumers Union.

"With a handful of companies deciding what makes it in programming," said Mr. Kimmelman, "many points of view, many tastes are underrepresented in the marketplace."

He said ownership limits should, if anything, be increased so that no company has that much power over what programming people can see.

Underscoring their point, advocates say that while the number of national television channels has increased greatly, ownership of those outlets has not.

Proponents of media deregulation say this sort of analysis ignores economics. Good media executives, they say, know that people will pay well over $50 per month for 200 channels only if they are offered a compelling array of choices.

"Common ownership can lead to more diversity," Mr. Powell said. "What does the owner get for having duplicative products? I don't know why you'd want to have two newspapers that say the same thing. I would say, `Let's make one Democratic, let's make one Republican."'

And, he said, large corporations are often better positioned to start and sustain various media outlets than are smaller companies.

For instance, regulators allowed the News Corporation, headed by Rupert Murdoch, to buy The New York Post in 1993, despite its ownership of New York's Channel 5, because the newspaper, owned by the developer Peter Kalikow, was only a breath away from death. That saved a local voice in New York that would have been lost.

And consumer demand has, in fact, pushed cable companies to start their own local news and public affairs channels, adding to diversity. ...

EchoStar, meanwhile, has found that there is money in offering immigrant communities programming from their home countries with Russian-, Arab-, Chinese-, South Asian- and Greek-language packages.

Public interest advocates said all this misses the most important points. They question how many people really use the Internet as a major news source.

According to an F.C.C.-commissioned study, the average television viewer watches more than 2.5 hours of news a week. Mark Cooper, director of research for the Consumer Federation of America, says studies show that people use the Internet for news about one-fifth as much.

Still, Mr. Kimmelman said, "This is not to say something horrible happens day in and day out. If it even happens once it wasn't worth the risk of distorting democracy by letting somebody own too much of the media."

But, he said, "I don't know that if because you can articulate the anxiety it is a compelling case for having massive structural regulation of the industry."

Of course, there must be some terrible mistake here. Nobody is really disagreeing with the substance of what Professor Krugman is saying, are they Professor DeLong?

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