S. HRG. 108–934 MEDIA OWNERSHIP HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED EIGHTH CONGRESS FIRST SESSION MAY 13, 2003 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 67–526 PDF WASHINGTON : 2011 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 11:42 Jul 26, 2011 Jkt 67526 PO 00000 Frm 000001 Fmt 05011 Sfmt 05011 S:\GPO\DOCS\67526.TXT SCOM1 PsN: JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED EIGHTH CONGRESS FIRST SESSION JOHN MCCAIN, Arizona, Chairman TED STEVENS, Alaska ERNEST F. HOLLINGS, South Carolina, CONRAD BURNS, Montana Ranking TRENT LOTT, Mississippi DANIEL K. INOUYE, Hawaii KAY BAILEY HUTCHISON, Texas JOHN D. ROCKEFELLER IV, West Virginia OLYMPIA J. SNOWE, Maine JOHN F. KERRY, Massachusetts SAM BROWNBACK, Kansas JOHN B. BREAUX, Louisiana GORDON H. SMITH, Oregon BYRON L. DORGAN, North Dakota PETER G. FITZGERALD, Illinois RON WYDEN, Oregon JOHN ENSIGN, Nevada BARBARA BOXER, California GEORGE ALLEN, Virginia BILL NELSON, Florida JOHN E. SUNUNU, New Hampshire MARIA CANTWELL, Washington FRANK R. LAUTENBERG, New Jersey JEANNE BUMPUS, Republican Staff Director and General Counsel ROBERT W. CHAMBERLIN, Republican Chief Counsel KEVIN D. KAYES, Democratic Staff Director and Chief Counsel GREGG ELIAS, Democratic General Counsel (II) VerDate Nov 24 2008 11:42 Jul 26, 2011 Jkt 67526 PO 00000 Frm 000002 Fmt 05904 Sfmt 05904 S:\GPO\DOCS\67526.TXT SCOM1 PsN: JACKIE C O N T E N T S Page Hearing held on May 13, 2003 ............................................................................... 1 Statement of Senator Allen ..................................................................................... 7 Statement of Senator Burns ................................................................................... 4 Prepared statement .......................................................................................... 4 Statement of Senator Cantwell .............................................................................. 14 Prepared statement .......................................................................................... 14 Statement of Senator Dorgan ................................................................................. 2 Statement of Senator Lautenberg .......................................................................... 8 Prepared statement .......................................................................................... 8 Article, dated March 25, 2003, by Paul Krugaman, entitled, ‘‘Channels of Influence’’ .................................................................................................. 9 Statement of Senator Lott ...................................................................................... 15 Prepared statement .......................................................................................... 15 Statement of Senator McCain ................................................................................. 1 Statement of Senator Nelson .................................................................................. 16 Statement of Senator Snowe ................................................................................... 11 Statement of Senator Stevens ................................................................................ 2 Statement of Senator Sununu ................................................................................ 13 Statement of Senator Wyden .................................................................................. 5 WITNESSES Blethen, Frank A., Publisher, Seattle Times ......................................................... 25 Prepared statement .......................................................................................... 27 Goodmon, James F., President and Chief Executive Officer, Capitol Broad- casting Company, Inc. .......................................................................................... 20 Prepared statement .......................................................................................... 23 Karmazin, Mel, President and Chief Operating Officer, Viacom, Inc. ................ 16 Prepared statement .......................................................................................... 18 Singleton, William Dean, Vice Chairman and Chief Executive Officer, Medianews Group, Inc.; Immediate Past Chairman of the Board of Direc- tors, Newspaper Association of America ............................................................ 28 Prepared statement .......................................................................................... 30 APPENDIX Bryan III, J. Stewart, Chairman and Chief Executive Officer, Media General, Inc., prepared statement ..................................................................................... 64 Hollings, Hon. Ernest F., U.S. Senator from South Carolina, prepared state- ment ...................................................................................................................... 63 Riskin, Victoria, President, Writers Guild of America, west, prepared state- ment ...................................................................................................................... 70 (III) VerDate Nov 24 2008 11:42 Jul 26, 2011 Jkt 67526 PO 00000 Frm 000003 Fmt 05904 Sfmt 05904 S:\GPO\DOCS\67526.TXT SCOM1 PsN: JACKIE VerDate Nov 24 2008 11:42 Jul 26, 2011 Jkt 67526 PO 00000 Frm 000004 Fmt 05904 Sfmt 05904 S:\GPO\DOCS\67526.TXT SCOM1 PsN: JACKIE MEDIA OWNERSHIP TUESDAY, MAY 13, 2003 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 9:33 a.m. in room SR– 253, Russell Senate Office Building, Hon. John McCain, Chairman of the Committee, presiding. OPENING STATEMENT OF HON. JOHN MCCAIN, U.S. SENATOR FROM ARIZONA The CHAIRMAN. I have been on this committee for 17 years. This is the first time that the sound system has been disabled before we have a hearing on the media. I am sure there is some plot there. Today, the Committee continues its series of hearings examining media ownership. This hearing will focus on the rules currently being reviewed by the Federal Communications Commission, par- ticularly those affecting television broadcasters and newspaper publishers. In the early 1940s and 1950s, the FCC adopted rules placing lim- its on the number of broadcast stations one company could own or control in each market, as well as the number of stations one com- pany could own throughout the country. In 1975, the Commission adopted a rule prohibiting one company from owning a broadcast station and a newspaper in the same market. Several of these rules were relaxed by the 1996 Telecommunications Act, where Congress set in motion a process intended to deregulate the structure of the broadcast television industry. To further this deregulatory trend, Congress mandated the Commission review its media ownership rules every 2 years to determine whether they remain necessary in the public interest. Several recent court cases have chastised the FCC for failing to justify retention of its ownership restrictions. I have spoken frequently in the past about the merits of deregulation in media markets. Today’s media landscape is wholly different from the 1940s or, for that matter, the 1970s. The average American consumer can get news and entertainment from one of the 200 cable television networks or innumerable Internet sites in addition to a broadcast television station or daily newspaper. So it is important for the FCC to review its rules to ensure that they reflect competitive and technological changes, and repeal or modify them as appropriate. I recognize, however, that media can have a tremendous impact in the day-to-day lives of Americans. As a result, we must approach these issues thoughtfully. Earlier this year, this committee held a (1) VerDate Nov 24 2008 11:42 Jul 26, 2011 Jkt 67526 PO 00000 Frm 000005 Fmt 06633 Sfmt 06633 S:\GPO\DOCS\67526.TXT SCOM1 PsN: JACKIE 2 hearing on media ownership in the radio industry, where serious concerns were raised about vertical integration. Likewise, the Com- mittee heard testimony last week about the negative attacks of vertical integration in the cable industry. In light of these experiences, the FCC must not approach these important issues lightly. More than half the members of this com- mittee have written FCC Chairman Michael Powell to weigh in on the proceeding. Many have expressed the belief that the Commis- sion should allow more time for public comment. Yet some of these issues have been tied up at the FCC for years, and the Commission has received thousands of comments in this review. I have confidence that Chairman Powell will ensure that the per- mission fulfills the court’s dictates and statutory mandate in a manner that is thoughtful and consistent with all applicable laws and the best interest of the American public. Given the amount of attention these issues have received, I be- lieve it is important for the Committee to hear from leaders in the media industry most directly affected by potential changes to these rules. I look forward to hearing the panelists explain their views on why the rules should be retained, relaxed, or eliminated. I thank the witnesses