Sunday, May 25, 2003

FCC plan will hurt, for some

Media deregulation

By Rhonda Abrams
Gannett News Service

Hey, what about us?

Regular readers know I get really irked at how small business is overlooked by the government. Legislation and regulation gets adopted hurting small companies, and nobody looks out for our interests.

Here's the latest case: The Federal Communications Commission is about to make it easier for giant media companies to own more television stations and newspapers. Its new rules would:

• Allow companies to own both a newspaper and a television station in all but the smallest markets. So it's quite likely that your only daily newspaper and a leading television station will have the same national owner.

• Allow media conglomerates to own more television stations in one community.

• Allow a few media Goliaths to own more television stations nationally.

OK, so why is this going to hurt your business?

1. Advertising rates will rise. There will be fewer media owners, and with less competition, prices go up.

It's going to cost more for a small company to get its message out.

Right now, excess advertising time on TV, especially cable TV, is sold relatively cheaply. But when national media companies own those TV stations, excess time will be included in advertising packages sold to national chains. So instead of seeing commercials for your local steakhouse, you'll get ads for Denny's.

For a view of the future, look at what has happened to radio. The Telecommunications Act of 1996 made it easier for big conglomerates to own more radio stations.

The result? According to the FCC, radio station advertising rates increased 81 percent.

2. Less coverage of small businesses. To save money, national media companies produce content centrally.

Local news budgets and locally originated shows get slashed. That means it's going to be a heck of a lot harder to get coverage for the annual pet parade that your pet store sponsors.

Once again, radio provides us with a view of the future. Nationally owned radio stations create much of their programming from one central location, even weather reports.

Weather reports may not be critical, but even vital news suffers. When a train carrying ammonia derailed in Minot, N.D., according to news reports, police called the radio stations - all six of which are owned by Clear Channel Communications.

Because Clear Channel, based in San Antonio, had reduced its local staff, no one answered for more than an hour. If the police can't get a local emergency covered on nationally owned media outlets, what chance do you have for your pet parade?

3. Less innovation. With fewer locally produced shows - both news and features - it'll be much more difficult for new products or services to get attention.

FCC Chairman Michael Powell says the proposed rule changes are justified because of new media options, such as cable and digital TV. But it's not the number of outlets that matters; it's the number of owners. They're the ones who set ad rates.

Rhonda Abrams is the author of The Successful Business Plan: Secrets & Strategies and The Successful Business Organizer. Register to receive Rhonda's free business tips newsletter at

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