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FCC Should Modernize its Cross-Ownership Rule to Keep Competition Alive

by Thomas Aiello / /

In 1975, the Federal Communications Commission (FCC) finalized their cross-ownership rule barring media companies from owning both newspaper and TV outlets in the same market. Nearly 43 years later this rule remains in effect and continues to distort the media industry. This means media in the digital age, dominated by news consumption through the internet, smartphones, and social media is being guided by a regulatory scheme that was implemented in the 20th century. And taxpayers have a stake in its modernization.

The media environment has changed significantly, with consumers no longer dependent on a few similarly-structured outlets for news. Instead of one or two newspapers and handful of television or radio stations, technological innovation has given rise to a much wider range of untraditional media options, resulting in a landscape that is considerably more competitive than it was in 1975.

But these market changes have also led to a drastic decline in print media publications. Nearly 400 daily newspapers (25 percent of all American newspapers) have closed down, and some outlets that remain are barely staying afloat amid decreased ad revenue and diminishing readership. With both local print and broadcast media struggling to hit revenue targets, many have been forced to lay-off journalists and support personnel. As a result, there are now fewer reporters covering the beat at city halls and state capitols and providing much needed governing transparency and taxpayer accountability to local and state lawmakers.

To remain competitive in a rapidly changing marketplace, waning local newspapers should be allowed to merge with media entities interested in providing capital that would allow the smaller outlets to not simply survive, but thrive. Permitting organizations to combine resources in this way allows local organizations to expand their coverage, increase investment in their operations, and streamline efficiencies that benefit consumers and taxpayers. Despite misguided arguments from the outdated rule’s proponents, elimination of the ban actually promotes competition in local markets and diversity of views. By infusing capital, these organizations could stay in business, and compete with other outlets in the area.

When the FCC has the opportunity to repeal this rule later this month, Commissioners should ask themselves this simple question: Is the American local media landscape in a trajectory of growth or decline? If we want local media outlets to thrive and provide the high quality of journalism required to keep governments accountable to taxpayers, then we must remove old regulatory barriers from the last century that can not longer help us meet the rapidly evolving demands of this one.