Satellite Radio Days: XM-Sirius Merger Sparks a Welcome Debate
By Mark Lloyd
February 26, 2007
The House Judiciary Committee this week plans to investigate whether the merger of two money-losing satellite radio companies would break antitrust rules designed to protect consumers from monopoly prices and services. This is exactly the wrong issue to examine.
Whether the proposed $13 billion merger of XM Satellite Radio Holdings Inc. and Sirius Satellite Radio Inc., the only two providers of this relatively new service, can clear antitrust barriers at the Department of Justice depends on how high the barriers are set. That’s why they want to merge before the end of a lame duck administration that sets the barrier pretty low.
Congressional leaders investigating the merger should take the opportunity to pressure antitrust regulators at the Justice department and the FCC to consider this proposed merger in an entirely different light. Media mergers matter because a robust, independent industry with diverse points of view is essential to our democracy. Therefore, media mergers should be judged on those merits.
Congress needs to embrace a thoughtful and pragmatic alternative to the FCC’s business-as-usual approach to media ownership. Americans’ ability to learn about and debate local, state and national issues and to monitor our representatives depends upon our exposure to news and discussion that is not controlled by a small group of mostly like-minded corporations.
Moreover, a strong democracy requires that many different parts of our community have an opportunity to contribute to the broader public debate. These basic principles are deeply rooted in our constitutional rights of free speech, and are at the core of all our communications laws.
Yet the FCC does not have the means today to determine whether its policies are promoting or discouraging independent and diverse speech. The last time the commission proposed new media ownership rules it relied on an unreliable and increasingly irrelevant market concentration formula designed for antitrust purposes to craft its so-called Diversity Index.
That’s the index employed by the FCC under former Chairman Michael Powell in 2002 to justify the commission’s decision to allow one corporation to own several radio stations, newspapers, and television stations in the same community. After howls of protest from millions of Americans, Congress and ultimately a federal appeals court, the FCC under its new chairman, Kevin Martin, must now reconsider its approach.
Alas, in its request last year for public comment the FCC is once again asking many of the wrong questions about market concentration. The agency wants to know what limits it should place on the number of stations that can be commonly owned in one market, and how it should address radio/television and newspaper/broadcast cross-ownership issues. The real question on the minds of the FCC commissioners, however, is this: Have new technologies created sufficient market competition to allow for greater media concentration?
Chairman Martin has announced 10 studies tied to the media ownership review. While the studies have not been fully described, it is at least clear that none of the studies focuses on the impact of local media diversity on democratic engagement, or on the diversity of information available to minority communities. The studies seem to focus on the financial well-being of the various media industries, not the democratic well-being of our communities.
That’s the challenge for those of us who care about the dangers of increased media concentration on our democracy. Accordingly, we must reframe the debate so that it is about public access to diverse sources of information which educate and inform all Americans, not about marketplace competition important only to the bottom line of big corporations. And we must demonstrate the importance of new sources of information on local democratic engagement.
These are not small challenges. Even though the FCC tips its hat to the idea that access to independent and diverse media is essential to our democracy, it quickly turns the conversation around to markets and no one seems to notice. The FCC is captured by administrators who, by and large, don’t even know how to ask questions about the democratic needs of the public.
Given this predicament, the Center for American Progress has worked with a small but diverse group of media scholars and lawyers over the past year to develop a way to really measure local media diversity, and a way to determine what level of media diversity actually supports strong local democracies. What we have developed is a series of measurements that are clear and easy to understand, and not too burdensome for the FCC to perform. We call it a “Metric for Local Media Diversity.”
In brief, our proposed Metric for Local Media Diversity is based on a set of four distinct but related measures:
1. Determine media markets in a way that captures the diversity of sources available to both the general public and significantly distinct “ethnic” audiences.
2. Count all “independent” media outlets that serve the local media market, including print, broadcast, cable, and Internet media; but include only those sources contributing locally produced news and public affairs.
3. Measure the potential audience of each particular media source in the market.
4. Measure the news workers for each media source in the market, with additional points given for gender and ethnic diversity.
At this week’s hearings on the XM-Sirius merger, members of Congress should press the FCC and Department of Justice on these types of issues, not just for the merger at hand but also for forthcoming media mergers. A new standard needs to be set. Let the XM-Serius hearings mark the beginning of that process.
Mark Lloyd is a Senior Fellow at the Center for American Progress who examines communications policy issues.
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