University of Pennsylvania Law School Public law and Legal Theory Research Paper Series Research Paper No 16 Fall 2002 Media Concentration Giving up on democracy C. Edwin baker University of Florida Law Review, Forthcoming This paper can be downloaded without charge from the Social Science Research Network ElectronicPapercollectionhttp://ssrn.com/abstractid=347342
University of Pennsylvania Law School Public Law and Legal Theory Research Paper Series Research Paper No. 16 Fall 2002 Media Concentration: Giving Up on Democracy C. Edwin Baker This paper can be downloaded without charge from the Social Science Research Network Electronic Paper collection: http://ssrn.com/abstract_id=347342 University of Florida Law Review, Forthcoming
MEDIA CONCENTRATION: GIVING UP ON DEMOCRACY PROFESSOR C. EDWIN BAKER November 6. 2002 baker@law. upenn.edu and 215-898-7419 or 212-533-9435 MEDIA CONCENTRATION: TABLE OF CONTENTS . CONSTITUTIONAL FRAMEWORK 6 IL CONCENTRATION POLICY A. Antitrust law and the media B. Media-specific rules IIL OWNERSHIP AS NOT A PROBLEM 56 A Market Determined Performance B Ownership is Diverse C Sociology of Production- Journalistically Determined Content IV. PROBLEMS POSED BY A. Six Problems and a doubtful benefit 105 B Ownership to Serve a Democracy: Diversity of Ownership 125 V. CONCLUSION: IMPLICATIONS FOR POLICY 128
MEDIA CONCENTRATION: GIVING UP ON DEMOCRACY PROFESSOR C. EDWIN BAKER / November 6, 2002 ebaker@law.upenn.edu and 215-898-7419 or 212-533-9435 MEDIA CONCENTRATION: TABLE OF CONTENTS I. CONSTITUTIONAL FRAMEWORK.................................................................................................6 II. CONCENTRATION POLICY.......................................................................................................26 A. Antitrust law and the Media............................................................................................ 28 B. Media-specific rules. ...................................................................................................... 36 III. OWNERSHIP AS NOT A PROBLEM...........................................................................................56 A. Market Determined Performance.................................................................................... 60 B. Ownership is Diverse...................................................................................................... 74 C. Sociology of Production - Journalistically Determined Content......................................... 99 IV. PROBLEMS POSED BY OWNERSHIP......................................................................................104 A. Six Problems and a Doubtful Benefit............................................................................ 105 B. Ownership to Serve a Democracy: Diversity of Ownership............................................ 125 V. CONCLUSION: IMPLICATIONS FOR POLICY...........................................................................128
MEDIA CONCENTRATION: GIVING UP ON DEMOCRACY During the twentieth century, virtually all western democracies saw growing media concentration as a threat to freedom of the press and to democracy. Most adopted laws to support press diversity, whether through competition(antitrust and media specific)laws or subsidy arrangements, often subsidies targeted specifically to support weaker competing media. Historically, it has been the same in the United States. A famous media journalist and press critic, A.J. Liebling, long ago quipped: freedom of the press belongs to those who own one. Liebling's quip makes ownership central. And that has been the general view. Although very cautious about government intervention, the single most important, semi-official study of the mass media in U.S. history, the Hutchins Commission Report of I wish to thank Yochai Benkler, Harry First, Eleanor Fox, and Michael Madow for suggestions and advice. Portions of this article were presented to the Communications Law Section of the aals in und Angebotsvielfalt zwischen Kartll- und Rundfunkrecht(2002)(conference proceeding O New Orleans(2002)and a preliminary version is included in Uwe Blaurock(ed ) Medienkonzentration Peter Humphreys, Mass Media and Media Policy in Western Europe 66-110 (1996) 6A.J. Liebling, The Wayward Pressman 265(1947)(ck]. In slightly different words-"e"freedom of the press is guaranteed only to those who own one-the same remark is quoted from later sources E.g.,A.J. Liebling, The Press 32(2 rev. ed, 1975) The Commission on Freedom of the Press, A Free and Responsible Press: A General Report on Mass Communication: Newspapers. Radio. Motion Pictures. Magazines and Books 5, 83-86(Chicago: U of Chicago Press, 1947) Baker-11/06/02
Baker - 11/06/02 - 1 - MEDIA CONCENTRATION: GIVING UP ON DEMOCRACY1 During the twentieth century, virtually all western democracies saw growing media concentration as a threat to freedom of the press and to democracy. Most adopted laws to support press diversity, whether through competition (antitrust and media specific) laws or subsidy arrangements, often subsidies targeted specifically to support weaker competing media.2 Historically, it has been the same in the United States. A famous media journalist and press critic, A.J. Liebling, long ago quipped: “freedom of the press belongs to those who own one.”3 Liebling’s quip makes ownership central. And that has been the general view. Although very cautious about government intervention,4 the single most important, semi-official study of the mass media in U.S. history, the Hutchins Commission Report of 1 I wish to thank Yochai Benkler, Harry First, Eleanor Fox, and Michael Madow for suggestions and advice. Portions of this article were presented to the Communications Law Section of the AALS in New Orleans (2002) and a preliminary version is included in Uwe Blaurock (ed.), Medienkonzentration und Angebotsvielfalt zwischen Kartell- und Rundfunkrecht (2002) (conference proceedings). 2 Peter Humphreys, Mass Media and Media Policy in Western Europe 66-110 (1996). 3 A. J. Liebling, The Wayward Pressman 265 (1947) [ck]. In slightly different words – “”freedom of the press is guaranteed only to those who own one” – the same remark is quoted from later sources. E.g., A. J. Liebling, The Press 32 (2nd rev. ed, 1975). 4 The Commission on Freedom of the Press, A Free and Responsible Press: A General Report on Mass Communication: Newspapers, Radio, Motion Pictures, Magazines, and Books 5, 83-86 (Chicago: U. of Chicago Press, 1947)
1947,saw the problem of concentration-the decreased proportion of the people who can express their opinions and ideas through the press"-as one of three factors threatening freedom of the press They accepted the reality that modern economic forces drive inexorably toward media concentraion Even then, most American cities were coming to face daily newspaper monopolies-a trend that has since increased, leaving only a handful of American cities with separately owned and operated daily papers. One way to understand the Commission's central recommendations concerning the need for a socially responsible press" is that it tried to make the best of a bad situation Id. at 1. See also, id at 17, 37-44. Although clearly focused on dangers of media concentration, Zechariah Chafee, Jr, Government and Mass Communications. A Report from the Commission on Freedom of the Press, v. 2, 537-677, Chafee was very skeptical of use of law to restrict it. For example hough favoring" a very sparing use of the Antitrust laws against communications industries, id. at 674 Chafee emphasized the little the antitrust laws could do, id at 653, 676-77, and the dangers in their use ld.at666-74 'Cf. id. at 617("It is obvious, then, that bigness in the press is here to stay whether we like it or not' In 1910, with much smaller populations, 689 American cities or towns had competing daily newspapers. In 1940, shortly before the Hutchins Commission's Report, the number had fallen to 181 By 2002, the number was 14, with another 12 cities having JOAs, that is cities with two or more papers that are required to be editorially independent but operated jointly as one business. See C. Edwin Baker Advertising and a Democratic Press 16, 146 n34(1994); Facts About Newspapers 2001 http://www.naa.org/info/factso1.htmlWaltBraschTheMediaMonolithSynergizingAmerica Counterpunchathttp://www.counterpunch.org/brachmedia.html Baker-11/06/02
Baker - 11/06/02 - 2 - 1947,5 saw the problem of concentration – “the decreased proportion of the people who can express their opinions and ideas through the press” – as one of three factors threatening freedom of the press.6 They accepted the reality that modern economic forces drive inexorably toward media concentration.7 Even then, most American cities were coming to face daily newspaper monopolies – a trend that has since increased, leaving only a handful of American cities with separately owned and operated daily papers.8 One way to understand the Commission’s central recommendations concerning the need for a “socially responsible press” is that it tried to make the best of a bad situation. 5 Id. 6 Id. at 1. See also, id at 17, 37-44. Although clearly focused on dangers of media concentration, Zechariah Chafee, Jr., Government and Mass Communications, A Report from the Commission on Freedom of the Press, v. 2, 537-677, Chafee was very skeptical of use of law to restrict it. For example, though favoring “a very sparing use of the Antitrust laws against communications industries,” id. at 674, Chafee emphasized the little the antitrust laws could do, id. at 653, 676-77, and the dangers in their use. Id. at 666-74. 7 Cf. id. at 617 (“It is obvious, then, that bigness in the press is here to stay, whether we like it or not”). 8 In 1910, with much smaller populations, 689 American cities or towns had competing daily newspapers. In 1940, shortly before the Hutchins Commission’s Report, the number had fallen to 181. By 2002, the number was 14, with another 12 cities having JOAs, that is cities with two or more papers that are required to be editorially independent but operated jointly as one business. See C. Edwin Baker, Advertising and a Democratic Press 16, 146 n34 (1994); Facts About Newspapers 2001, http://www.naa.org/info/facts01.html; Walt Brasch, The Media Monolith, Synergizing America, Counterpunch at http://www.counterpunch.org/brachmedia.html
The media is a huge non-democratically organized force that has major power over politics public discourse, and culture. As such, it is not a surprise that media concentration receives great attention. Just as in Europe where pressure for governmental responses came mostly from Left and Centrist political parties, trade unions, journalists'associations and consumer groups, many Americans, especially on the left and center but many conservatives as well, see media concentration as a problem and dispersed ownership as crucial for democracy. Legal policy long reflected that view Nevertheless, the last twenty years have seen a remarkable change in the legal treatment of media concentration. This Article aims to describe and evaluate that change 9 Humphreys, supra note 2, at 94 Io The literature is filled with both popular and scholarly discussions. Robert Mcchesney is possibly the best known leftist currently emphasizing the concern. See, e.g., Edward S. Herman robert w McChesney, The global Media: The new Missionaries of Corporate Capitalism(1997). More centrist is Ben H Bagdikian, Media Monopolies. 6 ed(2000). a partial dissent might describe the central problem as involving market forces generally as the main determinant of the media content, not the pecifics of ownership. See, e.g., Robert Brill Horwitz, Communication and Democratic Reform in South africa(2001). Objections to the distorting effects of commercialism was, for example, the basis of European commitment to public broadcasting. These most courts find a public broadcasting monopoly to be consistent with broadcasting freedom and some countries view the existence and adequate support of public broadcasting, at least in some contexts, to be constitutionally required. Eric Barendt Broadcasting Law: A Comparative Study 57-59, 69-70, 74(1993). Obviously, the same critic can object to concentrated ownership or market forces or both Baker-11/06/02
Baker - 11/06/02 - 3 - The media is a huge non-democratically organized force that has major power over politics, public discourse, and culture. As such, it is not a surprise that media concentration receives great attention. Just as in Europe where pressure for governmental responses came mostly from Left and Centrist political parties, trade unions, journalists’ associations and consumer groups,9 many Americans, especially on the left and center but many conservatives as well, see media concentration as a problem and dispersed ownership as crucial for democracy.10 Legal policy long reflected that view. Nevertheless, the last twenty years have seen a remarkable change in the legal treatment of media concentration. This Article aims to describe and evaluate that change. 9 Humphreys, supra note 2, at 94. 10 The literature is filled with both popular and scholarly discussions. Robert McChesney is possibly the best known leftist currently emphasizing the concern. See, e.g., Edward S. Herman & Robert W. McChesney, The Global Media: The new Missionaries of Corporate Capitalism (1997). More centrist is Ben H. Bagdikian, Media Monopolies, 6th ed. (2000). A partial dissent might describe the central problem as involving market forces generally as the main determinant of the media content, not the specifics of ownership. See, e.g., Robert Brill Horwitz, Communication and Democratic Reform in South Africa (2001). Objections to the distorting effects of commercialism was, for example, the basis of European commitment to public broadcasting. These most courts find a public broadcasting monopoly to be consistent with broadcasting freedom and some countries view the existence and adequate support of public broadcasting, at least in some contexts, to be constitutionally required. Eric Barendt, Broadcasting Law: A Comparative Study 57-59, 69-70, 74 (1993). Obviously, the same critic can object to concentrated ownership or market forces or both
This recent change has had three fronts. Most overtly, there has been a dramatic reduction in legal restrictions on ownership concentration, especially related to broadcast, cable, and media cross- ownership restrictions. Second, there has been a change, often unarticulated, in the conception of appropriate criteria or standards with which to identify objectionable concentration. Something resembling anti-trust standards that look solely at market power to raise prices above competitive levels has replaced previously invoked democratic concerns. Finally, within Constitutional doctrine especially in the lower courts, there has been an unarticulated change from viewing the press as instrumentally-valued entities that are protected for how they serve people's need for a robust communication order to viewing media entities as being rights-bearing units in their own right. This changed conception changes in turn the view of media structural regulation from being an often appropriate means to serve First Amendment interests in a free and diverse communications order to being a presumptive interference with corporate entities First Amendment rights Parts I (related to constitutional doctrine) and Il(related to legal regulation )of this Article will critically describe these shifts, including the underlying assumptions that support them. These Parts provides the empirical basis for the essays title. My evaluative claim is that the legal order is giving up on democracy in two profoundly troubling ways. First, policy makers, especially in the FCC, have been abandoning their earlier concerns with how media ownership can be structured to further a democratic society and are now apparently concemed only with making the media more responsive to demands for commodities. Second, judicial doctrine evidences a declining willingness to accept legislative structural policies in the media area, in a sense going back to a Lochner-era, unreflective Baker-11/06/02
Baker - 11/06/02 - 4 - This recent change has had three fronts. Most overtly, there has been a dramatic reduction in legal restrictions on ownership concentration, especially related to broadcast, cable, and media crossownership restrictions. Second, there has been a change, often unarticulated, in the conception of appropriate criteria or standards with which to identify objectionable concentration. Something resembling anti-trust standards that look solely at market power to raise prices above competitive levels has replaced previously invoked democratic concerns. Finally, within Constitutional doctrine, especially in the lower courts, there has been an unarticulated change from viewing the press as instrumentally-valued entities that are protected for how they serve people’s need for a robust communication order to viewing media entities as being rights-bearing units in their own right. This changed conception changes in turn the view of media structural regulation from being an often appropriate means to serve First Amendment interests in a free and diverse communications order to being a presumptive interference with corporate entities’ First Amendment rights. Parts I (related to constitutional doctrine) and II (related to legal regulation) of this Article will critically describe these shifts, including the underlying assumptions that support them. These Parts provides the empirical basis for the Essay’s title. My evaluative claim is that the legal order is giving up on democracy in two profoundly troubling ways. First, policy makers, especially in the FCC, have been abandoning their earlier concerns with how media ownership can be structured to further a democratic society and are now apparently concerned only with making the media more responsive to demands for commodities. Second, judicial doctrine evidences a declining willingness to accept legislative structural policies in the media area, in a sense going back to a Lochner-era, unreflective
notion of existing property distributions as a natural baseline. This change essentially replaces democracy, which has authority to make structural policy to further people's values, with the market as a measure of value. Both in administrative realms and implicitly in lower court constitutional decisions, there has been a fundamental shift away from the notion that the government aim should be to promote a democratic communications order. The new attitude is that the only goal of regulation should be to assure efficient production of commodified media products within competitive markets My criticism would be inapt if ownership concentration is not a problem. Thus, Part Ill describes but then rejects arguments that the concern with ownership and undue concentration is either misguided or, at least, vastly overstated. Unless those arguments are rightly rejected, antitrust law as currently practiced may embody the only needed limits on ownership. Finally, Part IV catalogues some more specific objections to mass media concentration and suggests elements of more desirable policies. Both Parts Ill and IV assert that the special democratic and cultural role of the media, as well as specific features of the market for media goods, explain why even a desirable recasting of antitrust law to include consideration of non-economic factors would be insufficient for optimal media ownership regulation and argues for special media-related ownership policies I Maurice E. Stucke Allen P Runes, Antitrust and the Marketplace of Ideas, 69 Antitrust LJ, 249 (2001) Baker-11/06/02
Baker - 11/06/02 - 5 - notion of existing property distributions as a natural baseline. This change essentially replaces democracy, which has authority to make structural policy to further people’s values, with the market as a measure of value. Both in administrative realms and implicitly in lower court constitutional decisions, there has been a fundamental shift away from the notion that the government aim should be to promote a democratic communications order. The new attitude is that the only goal of regulation should be to assure efficient production of commodified media products within competitive markets. My criticism would be inapt if ownership concentration is not a problem. Thus, Part III describes but then rejects arguments that the concern with ownership and undue concentration is either misguided or, at least, vastly overstated. Unless those arguments are rightly rejected, antitrust law as currently practiced may embody the only needed limits on ownership. Finally, Part IV catalogues some more specific objections to mass media concentration and suggests elements of more desirable policies. Both Parts III and IV assert that the special democratic and cultural role of the media, as well as specific features of the market for media goods, explain why even a desirable recasting of antitrust law to include consideration of “non-economic” factors11 would be insufficient for optimal media ownership regulation and argues for special media-related ownership policies. 11 Maurice E. Stucke & Allen P. Grunes, Antitrust and the Marketplace of Ideas, 69 Antitrust L.J. 249 (2001)
I CONSTITUTIONAL FRAMEWORK Legal regulation of concentration consists in two parallel but intersecting stories: the legal regime adopted by Congress or state legislative bodies and expanded by administrative agencies and the Constitutional standards that this regime must meet. Change could occur in either the regime favored by policy makers or the Constitutional standards formulated by the courts. In fact, change has occurred in both dimensions. Although as will become clear, holding the two separate is somewhat artificial,here I will consider the situation as it appears constitutionally and then in Part II look at development within the actual legal regime The First Amendment might have at least four possible relations to media concentration Arranged in order of increasing opposition to concentrated media, the First Amendment might: ( i require govemment to limit concentration, (ii prohibit government from affirmatively promoting concentration,(ili) leave government relatively free to choose structural media policies in general or at 12 An illustration might be the invalidation by lower courts as unconstitutional a statutory ban on cros ownership of telephone company and cable systems in their local operating area, and the dismissal of an appeal of this holding as moot due to Congressional action that on policy grounds eliminated the challenged restrictions. United States v. Chesapeake Potomac Telephone Co., 516 U.S. 415(1996) (vacating lower rulings after passage of the Telecommunications Act of 1996) Baker-11/06/02
Baker - 11/06/02 - 6 - I. CONSTITUTIONAL FRAMEWORK Legal regulation of concentration consists in two parallel but intersecting stories: the legal regime adopted by Congress or state legislative bodies and expanded by administrative agencies and the Constitutional standards that this regime must meet. Change could occur in either the regime favored by policy makers or the Constitutional standards formulated by the courts. In fact, change has occurred in both dimensions. Although as will become clear, holding the two separate is somewhat artificial,12 here I will consider the situation as it appears constitutionally and then in Part II look at development within the actual legal regime. The First Amendment might have at least four possible relations to media concentration. Arranged in order of increasing opposition to concentrated media, the First Amendment might: (i) require government to limit concentration, (ii) prohibit government from affirmatively promoting concentration, (iii) leave government relatively free to choose structural media policies in general or at 12 An illustration might be the invalidation by lower courts as unconstitutional a statutory ban on cross ownership of telephone company and cable systems in their local operating area, and the dismissal of an appeal of this holding as moot due to Congressional action that on policy grounds eliminated the challenged restrictions. United States v. Chesapeake & Potomac Telephone Co., 516 U.S. 415 (1996) (vacating lower rulings after passage of the Telecommunications Act of 1996)
least in respect to concentration, or, finally, (iv) seriously limit governments authority to engage in tructural regulation including its power to restrict concentration. My claim here will be that the Supreme Court holdings have been most consistent with the third possibility- leaving the government relatively free to engage in structural regulation. However with encouragement by the Supreme Court's recent articulation of a new doctrinal approach and with a new, usually unarticulated conception of media claimants status, lower courts have increasingly adopted the fourth -constitutional limits on legislative power over structure American constitutional jurisprudence generally shies away from finding affirmative obligations the first possibility. Mostly it only identifies Constitutional prohibitions. Thus, unsurprisingly, the Constitution has never been authoritatively interpreted to require limits on concentration. Closely related is the issue of whether the Constitution affirmatively requires the regulate in behalf of expressive interests of non-owners or the needs of the public? So far the answer has been no. In the most prominent case, a political party and a public interest group each asked the I3 Analytically, there is also the possibility that the First amendment requires the government to promote concentration. I leave that out-no one whom I know has advanced such a position even as a possibility Obviously, this claim is too simple. The one can be turned into the other-the government can be prohibited from not taking some action- which is happens whenever in an equal protection case the court invalidates an exclusion of a group from the category of beneficiaries 15 This situation can be contrasted with common requirements, of both constitutional and statutory basis for access in many situations in Europe- although only a speaker's right to reply to false or negative Baker-11/06/02
Baker - 11/06/02 - 7 - least in respect to concentration, or, finally, (iv) seriously limit government’s authority to engage in structural regulation including its power to restrict concentration.13 My claim here will be that the Supreme Court holdings have been most consistent with the third possibility – leaving the government relatively free to engage in structural regulation. However, with encouragement by the Supreme Court’s recent articulation of a new doctrinal approach and with a new, usually unarticulated conception of media claimants’ status, lower courts have increasingly adopted the fourth – constitutional limits on legislative power over structure. American constitutional jurisprudence generally shies away from finding affirmative obligations, the first possibility. Mostly it only identifies Constitutional prohibitions.14 Thus, unsurprisingly, the Constitution has never been authoritatively interpreted to require limits on concentration. Closely related is the issue of whether the Constitution affirmatively requires the government to regulate in behalf of expressive interests of non-owners or the needs of the public? So far the answer has been no.15 In the most prominent case, a political party and a public interest group each asked the 13 Analytically, there is also the possibility that the First Amendment requires the government to promote concentration. I leave that out – no one whom I know has advanced such a position even as a possibility. 14 Obviously, this claim is too simple. The one can be turned into the other – the government can be prohibited from not taking some action – which is happens whenever in an equal protection case the court invalidates an exclusion of a group from the category of beneficiaries. 15 This situation can be contrasted with common requirements, of both constitutional and statutory basis, for access in many situations in Europe – although only a speaker’s right to reply to false or negative
court to require(or to order the FCC to require)a television network to air their paid editorial advertisements. The plaintiffs claimed, first, that government involvement in broadcast licensing and in prohibiting non-licensed broadcasting were among the factors that created state action. Second, they argued that this state action created a constitutional duty to require that broadcasters present communications by outsiders, especially for those outsiders willing to pay to have their message presented. With only Justices Brennan and Marshall dissenting on these points, the majority rejected one or the other of these claims 6 However, should the answer always be the same-for example, if the government creates, or there otherwise is in fact, a communications monopoly? Should common carriage be constitutionally required, for example, if the government creates a local telephone or cable monopoly? At least when the government grants monopoly control to a single cable company, a claim was made that the Constitution requires the government to condition the grant on some duty to allow some public access statements about the speaker is a common requirement at the constitutional level. See Barendt, supra note 10 at 144-67 16 CBS v. DNC, 412 U.S. 94(1973). In addition to Brennan and Marshall, several other Justices though it clear that the claim would be valid if there was state action but found no state action. More recently, however, the Court seems to be unanimous that the existence of state action -namely, state ownership of a broadcast station normally creates no type of forum and, thus, creates no obligation to present expression of outsiders. Arkansas Educational Television Commission v. Forbes, 523 U.S. 666(1998) Baker-11/06/02
Baker - 11/06/02 - 8 - court to require (or to order the FCC to require) a television network to air their paid editorial advertisements. The plaintiffs claimed, first, that government involvement in broadcast licensing and in prohibiting non-licensed broadcasting were among the factors that created state action. Second, they argued that this state action created a constitutional duty to require that broadcasters present communications by outsiders, especially for those outsiders willing to pay to have their message presented. With only Justices Brennan and Marshall dissenting on these points, the majority rejected one or the other of these claims.16 However, should the answer always be the same – for example, if the government creates, or there otherwise is in fact, a communications monopoly? Should common carriage be constitutionally required, for example, if the government creates a local telephone or cable monopoly? At least when the government grants monopoly control to a single cable company, a claim was made that the Constitution requires the government to condition the grant on some duty to allow some public access statements about the speaker is a common requirement at the constitutional level. See Barendt, supra note 10, at 144-67. 16 CBS v. DNC, 412 U.S. 94 (1973). In addition to Brennan and Marshall, several other Justices though it clear that the claim would be valid if there was state action but found no state action. More recently, however, the Court seems to be unanimous that the existence of state action – namely, state ownership – of a broadcast station normally creates no type of forum and, thus, creates no obligation to present expression of outsiders. Arkansas Educational Television Commission v. Forbes, 523 U.S. 666 (1998)