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Does Media Ownership Affect Media Stands?

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Does Media Ownership Affect Media Stands? May 2003 DOES MEDIA OWNERSHIP AFFECT MEDIA STANDS? THE CASE OF THE TELECOMMUNICATIONS ACT OF 1996 Executive Summary We are posting J.H. Snider and Benjamin I. Page’s 1997 study on the media ownership debate because it has become relevant. At a hearing on media ownership on May 13, 2003, Senate Commerce Committee Chair John McCain waved the study at a media mogul on the panel and said: “Do you think this is an anomaly?” McCain’s comment and the study to which it referred were subsequently featured on the front page of the business section in The Washington Post (Frank Ahrens, “FCC Sees Local Gain to Age of Max Media,” May 16, 2003, p. E1). During the late 1990s, the two papers that constitute the study were widely cited in academic books and articles. But this was the first time they had become relevant to the policy-making community. Paper #1 When the FCC and Congress were debating whether to give away or sell $70 billion worth of digital broadcast spectrum in 1996, local TV broadcasters embarked on a furious lobbying campaign to ensure that they got the spectrum for free. The study looked at two different ways that ownership interests may have influenced media coverage. The first paper studied “Overt Bias,” media coverage of the telecommunications issue that was under debate. The paper found that newspaper editorial coverage was indeed influenced by broadcast ownership interests. Paper #2 The second paper studied “Covert Bias,” actual or threatened media coverage of other issues that could apply pressure on a political candidate to take the position favored by local TV broadcasters on the telecommunications issue. The paper found that a prominent and powerful local broadcaster threatened media retribution on the key opponent of the spectrum giveaway, Senator Bob Dole, at a time and place where this threat would likely have maximum effect. The broadcaster, a member of the NAB board, made the threat soon after an NAB board meeting, which was consumed by the danger Senator Dole posed to the future of their industry. Paper #3 Finally, we are posting J.H. Snider’s 1999 paper on “The Paradox of News Bias,” which was published as a chapter in Politics, Discourse, and American Society: New Agendas, edited by Roderick P. Hart and Bartholomew H. Sparrow, Rowman & Littlefield: New York, 2001. The paradox of news bias is that broadcasters have a strong incentive to exercise bias in ways that are not verifiable or even detectable by either the public or scholarly community. Moreover, on issues of information policy, they have ample means to exercise bias this way. An analogy to the paradox of news bias is the paradox of 1 interest group bias. Interest groups and politicians have strong incentives to jointly engage in opportunistic behavior in ways that aren’t verifiable. The paradox of news bias calls for new methods to study the probability of broadcaster bias. The FCC’s and federal courts’ recent demands for hard evidence of bias to justify current media ownership rules make this paper especially relevant. These demands reflect a fundamental misunderstanding of the nature of evidence available to prove bias. There needs to be a shift from a “smoking gun” standard of evidence to an “appearance” standard of evidence. Appendices The Telecommunications Act of 1996 may have been a partial exemption from the paradox of news bias because of the huge stakes for the broadcasters and the very tight deadline on which they had to act. Nick Evans, for example, was unable to see Bob Dole personally (an unverifiable interaction), so was forced to write a letter (a verifiable interaction) in order to get his message to Dole before the upcoming vote on the Telecommunications Act of 1996. Finally, we are including three relevant appendices. Appendix A is the “threat” letter written on January 22, 1996 by Nick W. Evans to then-presidential candidate Senator Robert Dole. Evans was President of Spartan Communications, Inc., Board Member of the National Association of Broadcasters, and a dominant local broadcaster in Dole's home state of Kansas. The letter urges Senator Dole to reconsider his position regarding spectrum auctions, while reminding Senator Dole of the influence of Mr. Evans’ ten network affiliated TV stations in five different states. The letter was handed to Senator Dole just before the crucially important Iowa presidential caucuses by a general manager in an Iowa TV station owned by Spartan Communications. Appendix B provides two political cartoons from The Washington Post (July 27, 1997 and August 1, 1997) that illustrate the hypothesis tested in this study. Appendix C is a compilation of NAB lobbying activities for 1996. Relevance (in hindsight) to the Current Debate The FCC and courts have demonstrated substantial theoretical and methodological confusion about both the causes and consequences of media consolidation. The current debate over media consolidation would benefit from two contributions: 1) A well developed theory of media bias that provides a guide to potential adverse consequences of media consolidation, and 2) A well developed theory as to what type of evidence of bias it is reasonable to expect. An example of the need for a theory of media bias. Let's suppose there are two types of economic interests that could lead to bias: individual company bias and corporate bias. An example of potential individual company bias is Disney purchasing ABC News. It might be feared that ABC would give Disney undue favorable coverage. An example of potential industry bias is the broadcasting and newspaper industries acquiring each other. It might be feared that that the broadcasting industry would not cover a huge 2 government giveaway of spectrum to broadcasters and that this lack of coverage would be exacerbated if the interests of the broadcasting and newspaper industry were commingled. The policy prescription to address individual company bias (diverse ownership at the company level) is different than the policy prescription to address industry level bias (diverse broadcaster and newspaper ownership). In other words, any attempt to come up with a single diversity index is fundamentally flawed. An example of the need for a flexible standard of evidence. Let's suppose a media entity wants to use the news to pursue a corporate interest. What incentive and means does the entity have to pursue a type of bias that is unobservable and unverifiable? It may be that the incentive and means are substantial. As an analogy, think of the incentive and means interest groups have to exercise influence over politicians without leaving an observable and verifiable trail. The difficulty of proving interest group bias is so great and so widely recognized that legislative bodies have developed ethics guidelines based on an "appearance" rather than a "smoking gun" standard of evidence. The same standard of evidence may be appropriate to questions of media consolidation. If so, the demand by the FCC and courts for "hard" evidence is fundamentally misplaced. 3 Table of Contents EXECUTIVE SUMMARY .......................................................................................................................... 1 TABLE OF CONTENTS............................................................................................................................. 4 PAPER #1: OVERT BIAS (BY J.H. SNIDER AND BENJAMIN I. PAGE) ......................................... 5 ABSTRACT.................................................................................................................................................. 6 SOURCES OF DATA ..................................................................................................................................... 7 TV BROADCASTERS’ FINANCIAL INCENTIVES............................................................................................ 8 OWNERS AS POLITICAL ACTORS ................................................................................................................ 9 THE CHINESE WALL BETWEEN OWNERS AND MEDIA .............................................................................. 11 BIAS BY ACTION....................................................................................................................................... 12 BIAS BY OMISSION ................................................................................................................................... 18 Theoretical Grounds to Suspect a Blackout........................................................................................ 19 The Question of Newsworthiness ........................................................................................................ 20 CONCLUSION ............................................................................................................................................ 24 REFERENCES............................................................................................................................................. 27 PAPER #2: COVERT BIAS (BY J.H. SNIDER AND BENJAMIN I. PAGE)..................................... 29 ABSTRACT................................................................................................................................................ 30 SOURCES OF DATA ................................................................................................................................... 32 TV BROADCASTERS’ FINANCIAL INCENTIVES.......................................................................................... 32 BROADCASTERS
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