Gayane Torosyan (GT): Hello, and welcome to Iowa Talks. Today is Thursday, June 5, 2003. I’m Gayane Torosyan. Earlier this week, the FCC passed new ownership rules that many say are likely to reshape the media landscape. One proposed change would allow the same corporation to own both a broadcast station, radio or television, and a newspaper in the same media market. Another would allow a single company to own as many as three TV stations in large media markets. And a third change would allow a single corporation to own TV stations reaching 45% of the nation’s viewers, an increase from the previous limit of 35%. Since the formula for counting viewers discounts UHF stations, the actual allowable reach of a single corporation’s TV stations may be as high at 90% of all American viewers.

So on today’s Iowa Talks, we’re talking about those regulations with University of Iowa visiting law professor and former FCC commissioner, Nicholas Johnson.

Hi Professor Johnson. Hello, and welcome to Iowa Talks. It’s good to have you here.

Nicholas Johnson (NJ): Thank you, Gayane.

GT: We’re also joined by phone with James Gattuso of the Heritage Foundation. Hi James. Are you there?

James Gattuso (JG): I’m here. Good morning.

GT: Good morning. We’re also joined by phone with KMRY station owner Rick Sellers. Rick, are you there?

Rick Sellers (RS): Yes, I am, and good morning.

GT: Good morning. You will have to speak a little louder, Rick. Your phone line isn’t as perfect as James’. The station KMRY is operating in the Cedar Rapids area, and Rick could not be here because of other obligations.

Our listeners can join our conversation by calling in at 466-9100, locally. That’s 466-9100. Or 1-866-780-9100, toll free. That’s again, 1-866-780-9100, toll free.

Let’s do a little bit of introduction here.

James Gattuso is joining us from Washington DC, I’d like to hear from him just a little bit about his organization, The Heritage Foundation. Mr. Gattuso has served in various capacities, and he was also a member of the Federal Communications Commission, deputy chief of the Office of Plans and Policy from 1992 to 97. So can you tell us a little bit more about the Heritage Foundation, James?

JG: Sure, we’re what’s called a “think tank,” more technically a research organization here in Washington. Our mission is to—not so much to be university without students, like a lot of think tanks are—but to try and get good ideas, good solid economic ideas and academic ideas into the public policy today. So we work a lot with members of Congress and their staff and other policy and opinion makers here in Washington and around the country just to try and explain and articulate ideas. And we do, largely, take a pro-free market approach to issues.

GT: So James Gattuso is a research fellow in regulatory policy, the Heritage Foundation’s Roe Institute for economic policy studies. Tell us about the Roe Institute.

JG: The Roe Institute is the subset within the Heritage Foundation that works with economic policy, so my bailiwick is regulations in America. There are other people associated with us who are experts on the federal budget, on tax systems, on transportation, things like that. It gets confusing because it’s a different name, but really, think of the Roe Institute as a division of the Heritage Foundation.

GT: Okay. Fair enough. Thank you so much. And, Rick Sellers, your station is at 1540 AM, K-Memory.

RS: That’s correct.

GT: Tell us just in a few words what you guys do.

RS: Well, we have fun. I think, probably, large corporate radio America did me a favor by allowing me to live a life’s dream, and that’s to own my own radio station. And so that’s what I did about five years ago. It’s KMRY, as you mentioned. It’s a small AM radio station, and we are formatted, we like to say, for adults of all ages. It’s what we call “an adults standards station.” We are a music station, but we do quite a bit of talk. Our mainstay is bringing community radio back to this market, and maybe we can talk about some of those little things later on. But our big claim to fame in our rise in ratings, revenue, and respect is bringing radio back to town, doing things for our community.

GT: So localizing, in other words.

RS: Absolutely.

GT: Let’s get back to your position and your insider view of the changes that are about to happen in the media industry.

But first of all, I have this crazy idea, along with Nick Johnson here. We thought that we might introduce the other perspective here. In other words, Nick Johnson will try to articulate James Gattuso’s perspective on the new regulations, then we’ll go to James, if you don’t mind, and ask you to represent the other, the opposing view, the one that’s against consolidation, against the latest decision, and see what comes up. This way we’ll summarize everything in a much quicker way.

JG: Or, I suspect it might be the other way around. But that’s okay.

GT: Okay, well, let’s see how it works, and try to keep it brief Nick Johnson.

NJ: Okay, well, James Gattuso is perfectly capable of speaking for himself. He has a brilliant academic record from USC and UCLA and, of course, a number of positions in government, including Vice President Dan Quayle’s office on the Presidential Council of Competitiveness.

I would summarize what I think to be his position as follows -- and I hope this will be faster. Maybe not.

Number one, is that the 1934 Communications Act is simply old, it’s nearly 70 years old, and that is reason to look at it.

Number two, that there’s no real demonstrated need for rolling back these standards because there’s no demonstrable harm from the accumulation of media, in terms of the number of outlets. We have multiples more today than we had back in the 1930’s, and in terms of the amount of diversity, we have a great diversity of voices. And, finally, under that as a subset is the existence of the Internet, which provides an enormous array of diversity today and virtually does away with any need, even, for diversity in the over-the-air.

A third point would be a desire to preserve the over-the-air so-called “free television.” Because there are some folks who don’t have cable. In order to do that, broadcasters need to have greater revenue in what has become a much more economically competitive marketplace for over-the-air stations. And with the additional revenue that comes with consolidation, the local stations can provide more of the local service that Rick Sellers is providing that stations now can’t afford to provide because they don’t have the income that comes from oligopolistic positions.

Finally, although I haven’t heard it from James’ quarters, one could argue that, after all, under our governmental system, this responsibility’s been handed off to the FCC, and we trust the Commission to do the best it can. If you don’t like the Commission, then you vote for a different president or Congress, but basically it’s the FCC’s responsibility.

And, finally, that the courts have been raising objections to the FCC’s ownership standards, and that that must be taken into account as well. That is to say, they have not been persuaded that there are reasons for limitations on ownership.

How’d I do, James?

JG: You did pretty well. The only thing that got my attention was trusting the FCC.

GT: By default.

NJ: Actually, you would like to do away with ownership standards entirely, as I understand it.

JG: What I would like to do is to see the ownership standards enforced by the anti-trust law, the way we do with virtually every other industry in the country. Because the anti-trust regulators have a hundred years’ experience with what really is a fairly difficult and a case-by-case fact intensive analysis that has to be done when you’re looking at diversity and competition.

NJ: And a perfectly understandable point of view from someone who works in the Roe Institute for Economic Policy Studies. You won’t be surprised if I tell you that I think there are some other issues besides mere economic competitiveness. But why don’t you take a crack at trying to put forward what you believe to be, probably, my position.

JG: Okay. Actually, this is fun. I’ve done a lot of these radio shows, and no one has asked me to describe the other side.

NJ: Nor me. That’s why it occurred to me that it would be fun for both of us.

JG: The basic argument that I hear against the change in the rules, in favor of the rules does get down into several levels.

The first level is the concern over the number of players in the market. I hear a lot of people signing the—it’s turned out that there’ve been a lot of mergers, a lot of companies involved in media are getting bigger, certainly bigger than they used to be, and that there’s a fear that the number of big companies is so small that there’s not enough choice, diversity, competition in our media.

Now, as to choice, diversity and competition, the second level is that, and as Commissioner Johnson just mentioned, is that it is not just a matter of competition. It’s not subject to economic analysis, that diversity in itself is a special asset and a special consideration when we’re talking about media that does not apply when we’re talking about the steel industry or the cement industry. So the argument, as I understand it, is that there must be some special care taken when we’re talking about the media, and not just apply the normal rules of competition.
GT: Yeah, because it’s the public’s airwaves.

JG: Because it’s there’s a public interest involved, exactly.

A third level, and a lot of this does break down, I know, into lots of individual issues, is concern over not just diversity and competition choice, but looking at what’s called—a word we don’t get to use very often—monopsity power, what’s happening downstream with producers. Rock musicians have come out against these rules, in that a lot of people who sell services to broadcasters and to media are concerned that there will be a monopsony, which means that the buyer of services has undue market power. That breaks off into lots of different subareas, each of which has its own analysis.

I hope I did fairly describing the arguments.

NJ: Well, if I may, Gayane, James, Rick, I’d like to add a few more concerns of mine.

The argument, from my position, has been for the most part, by most people, as James stated it. My concerns actually go beyond that. James, you may be surprised to hear this, but I would not be troubled by having only one owner of all mass media in America, under a different set of conditions. AT&T, before it was broken up—and I think you support me on the break up of AT&T. Am I right about that?

JG: Perhaps not the way it was done, but the fact that we don’t have a monopoly anymore. I can see where you’re going.

NJ: Well, anyway, when AT&T had a monopoly, the law, the expectation, the social practice, the regulation, was that, number one, anybody who wanted a telephone could get it. And, number two, once you got a phone, you could say anything over the phone that you wanted to say. Now, the FBI might come after you, but AT&T wouldn’t. There was a total separation of content, the speech, the telephone conversation, on the one hand; and on the other hand, the conduit, the wires, the telephones, the system.

Now what’s happened in broadcasting and cable and satellite is that it doesn’t really make any difference how many owners you have because we have this merger of content and conduit, so that the cable distribution is a subsidiary of a larger global media conglomerate that also owns the cable programming suppliers.

Plus, as James well knows as a distinguished lawyer, the Supreme Court has consistently held that (a) only the people who own the mass media have any right to free speech. And, of course, they should have a right to free speech. But what the Supreme Court goes on to say is that (b) with that right to speak goes their right to censor everybody else. And I’m not even talking about having access to the mass media at no charge, which I think ought to be provided.

I’m talking about being able to buy time, buy space in a newspaper. A newspaper has space for sale, it has posted rate cards. If they don’t like the content of your ad, the Supreme Court has said they have a constitutional right to keep your ad out of their paper. If the radio or television station doesn’t like your commercial, they have a constitutional right to keep the content of that commercial off of the airwaves. They can say, “We just don’t want the people of this community to get that information that you’re trying to get out there.”

The third factor is this multiple media, a single global conglomerate that owns book publishers; movie studios; television networks; cable distribution systems; video and DVD manufacturing, and then sales and rental; overseas media properties. When you put this together, that’s what leads to what you’re calling the monopsony, which is made further difficult once you give someone a five million dollar book advance and you hold the movie rights, you really do have to hype that. You really cannot bring along the new quality novelist down at the Iowa Writer’s Workshop Program here because you’ve got this commitment to the superstar.

And the final two things are the repeal of the Fairness Doctrine, which never provided much, but at least required a modicum of balance in presentation. And the virtual elimination of any real community service responsibility of the kind of thing that Rick Sellers is doing on his own and that the FCC used to require as a part of the contract, the bargain, where the licensee gets the right to make private profit from the use of public property. But in exchange, the payment back to the public takes the form of community service, local news, local public affairs, announcements about lost dogs and new babies. That’s been pretty much done away with.

So it’s the combination of these five factors with the accumulation of mass media that creates the real devastating impact on democracy, from my perspective.

JG: I have to say, I’m used to talking to a lot of the opponents of the FCC’s action, and they said they took on way too much in one bite, where they should’ve taken on these issues separately. I think you have the courage at least to say that it should’ve been bigger.

There are many more issues here. You’ve raised so many issues that it would probably take the FCC ten years to wade through them, but I think you’re right to say that a lot of these are connected.

RS: This is Rick. Can I interrupt here for a second, too? There’s something else that maybe the public is not aware of, but you generally cannot start up a new radio station. It’s very difficult. People tell me, “Well, gee, why don’t you have an FM up there is Cedar Rapids.” You can’t. There are absolutely no licenses available, and that’s the case in most of the markets in the country.

NJ: You might add, Rick, that you are in one of the few industries in America where if anybody does choose to start operating a station on 1450 kilohertz in the Cedar Rapids area, you have the power to send them to Levenworth Penitentiary.

RS: Yep, if they tried it.

NJ: So that’s a little different than what we normally think of as free private enterprise.

JG: If I can respond to two points.

GT: Please go ahead.

JG: I don’t know the situation in Iowa specifically, but I do know that in many, many communities around the country, there are dark stations, dark channels that could be open to assignment. Now I am strongly in favor of the FCC lessening the requirements to start up a station, making it less expensive. There was a proceeding a couple of years ago that took a long time to process over low-power television stations, microstations, micro radio stations, that should’ve gone faster to land more competition up there. I think that’s the route the FCC should go to, instead of putting up ownership rules and trying to control the market.

If I could get to just one point, though, that Professor Johnson made. There’s a lot to tackle there, but he used the term “single global media company.” I think we have to be careful about that because there are global media companies, companies are bigger and they have cross investments—as do companies in just about every industry in the world. If you’re publishing a magazine, it does make sense to have a website and may make sense to have a cable television program. These things make sense, they’re good for the consumer in a lot of cases. The question is, is there a single global competitor? And I think it’s interesting that he’d say that. I keep on hearing that Rupert Murdoch in News Corp is a monopolist, yet a few minutes later I hear from people that AOL/Time Warner is a big monopolist. I hear that Disney’s a monopolist; that Viacom’s a monopolist. There’s about eight companies out there, all of which are said to be monopolists.

NJ: That’s because they weren’t paying attention in Economics 101.

JG: That’s right. Usually if you’re an monopolist you get to be the only one in the market, so if you have any competitors you don’t qualify.

And these companies, by the way, are not thriving. A lot of these, their stock has been going very much down over the past year or so; they aren’t making a lot of money. So that’s another perk of being a monopolist that they don’t have. These companies are struggling. They’re trying to make their way in a new media world—there’s lots of new technologies out there—and trying to find out what fits together.

I think the evidence is that they do have the competitors and that if they try and fit things together that don’t work, that consumers don’t appreciate, don’t get value from, they go down. And AOL/Time Warner is finding that out now. The market’s working. The market’s punishing people who aren’t providing value.

GT: Thank you, James. Let’s take a short break and come back after a minute to talk more about your position and about the questions that relate to FCC’s new regulations concerning media ownership. Nick Johnson is here in our studio; also, James Gattuso is joining us by phone from Washington DC; Rick Sellers from Cedar Rapids, a station owner. We’re talking about the FCC regulations. We’ll be back in a minute. I’m Gayane Torosyan.

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GT: Welcome back to Iowa Talks. I’m Gayane Torosyan, together with Nick Johnson, former FCC Commissioner and professor here at the University of Iowa College of Law. We’re talking about the FCC’s new media ownership rules. Joining us by phone is James Gattuso of the Heritage Foundation from Washington D.C., and from Cedar Rapid’s KMRY station owner, Rick Sellter. KMRY is 1450 AM on the radio dial, if you’re not listening to us, you can listen to him. Our numbers for our listeners are 466-9100 locally, 466-9100, and 1-866-780-9100 toll-free. That’s 1-866-780-9100. Our e-mail address is WSUI@uiowa.edu.

In fact, we do have an e-mail request, a question already from Tim. I believe he’s in Iowa City because he says,

“My primary concern is concentration of media will increase the difficulty of political candidates and organizations to get their message out due to the increasing price of advertising and the inability to get major media to cover their campaigns if they support positions opposed by those in control of large media. I understand there are 16,000 radio stations, and Clear Channel Corp. only owns 1,200. But if a handful of corporations control the overwhelming of actual market share, this will have the effect of stifling free and open debate.

“This applies equally to the Internet. There is lots of diversity but it is so diffused as to be essentially meaningless in a statewide, national or international debate, and I fear it’s only a matter of time before monopolies appear and the diversity of opinion is suppressed or pressed out of existence.”

This is Tim from Iowa City. I would like to go to James Gattuso for an answer. Also, James, if you have anything to add to Nick Johnson’s comments before because he was trying to represent your viewpoint. Go ahead.

JG: Well, actually, I think my answer to the question from your listener applies to what Nick said as well. I would be concerned if I saw a trend towards monopoly, heading towards less choice in media.

The problem I have with what the opponents are saying is I see absolutely no evidence for that. What we’ve seen over the past 10 years, 20 years, even 30 years is an explosion in types of media and in the ownership of media. Back to the example I always use is watching the Iraq War. I started out watching CNN, and I was curious as to whether they were telling me the right stuff. So I went over to MSNBC and they were telling me other things. I went over to Fox. Certainly it was a different viewpoint on Fox. I went to CBS. I flipped around channels, many, many channels. I went to the Internet. I went to my newspaper. I had almost limitless choices.

Now roll the clock back 30 years or so to the late 1960’s and the Vietnam War. What were my choices? I had the local newspaper, and, probably if I was lucky, three newscasts are giving me a half an hour a day. I have the choice of three big networks. There’s just such a tremendous difference in diversity today versus lack of diversity 30 years ago. I don’t think concentration is a problem. If anything, we should be celebrating the increases in diversity.

RS: Can I interrupt here for a second?

GT: Sure.

RS: Rick here in Cedar Rapids. However, I disagree with some of that. Let’s talk about local access. If you live in Dubuque, Iowa, you used to watch one station. Now local news is gone. The station was acquired by a group. Dubuque, Iowa, news is now originated here in Cedar Rapids, 70 miles away. How is the newscast in Cedar Rapids serving Dubuque, really?

JG: I don’t know what’s happening specifically in Dubuque, but I know a lot of stations are providing better local coverage by putting more resources into it.

Sometimes I worry that this policy debate is geared toward the goal of having every small town in America with 20 independent, not just independently owned but operated, stations with people who grew up in the town doing all of the talking and producing and such. I don’t think that people in smaller cities are well served by limiting what they hear and speak to the resources and talents, frankly, I mean based on the population base, of what can be found locally. There’s a lot of cases where going out a few miles and bringing in those resources to the town provides better coverage.

Now, one other thing. There is another myth out there that if you’re owned by a national chain or a national corporation, there’s less coverage by the networks—I don’t have a particular feel for the quality of the programming generally, but one thing is they know how to do is make money, they know what their viewers want. Their viewers want local coverage. So the networks, when they own a station, actually put more money and resources into local coverage than do locally owned outlets. That’s not commonly known, but they have the ability to do that. So I think consumers are well served when you have a system that allows people to offer them the best they can and let them choose.

RS: I used to be with a corporation. I was a general manager with one of the Heritage radio stations, and I sat at a budget meeting and was told to get rid of local coverage. And I argued that point, and that’s one of the reasons I left to be on my own.

JG: When you look at the resources that are being put into the news today, though, we also have more 24 hour stations on cable. I mean, 15 years ago could we have dreamed that we’d not just have CNN but MSNBC, CNBC, coverage 24 hours a day. And in a lot of cities, I don’t know about Iowa, there’s local news 24 hours. They have a cable station, a national chain, that provides what they call News Channel 8, which is local news 24 hours a day. There are plenty of opportunities out there, and companies have found out that they can make money by putting more resources into news and not less.

Now it doesn’t mean that people will always choose local news. I think there’s consumer demand for national news as opposed to local. We’re disappointed that people don’t want to watch what we think they should be watching, and sometimes they want to watch entertainment and sports. I hear a lot of stories about news stations being turned into some other format. That’s going to happen. We can’t guarantee that people will want to watch what we think is good for them. I think that’s something that the government has to keep its hands off, though. You have to let people choose what they see and hear, otherwise, I think there are constitutional problems.

GT: Thank you, James. I would like to remind our listeners that this is Iowa Talks. We’re discussing the FCC’s new ownership rules concerning media, and especially broadcast media because we have people who can speak to that topic. Our numbers are 466-9100, 466-9100 locally, and 1-866-780-9100. That’s 1-866-780-9100 toll free. You can e-mail your questions to us at WUSI@uiowa.edu. Our guests are Nick Johnson here in the studio. He teaches law at the University of Iowa, especially media law, cyberspace law. He has, by the way, a website, www.NicholasJohnson.org. And James Gattuso works for the Heritage Foundation. He’s joining us from Washington DC. About the Heritage Foundation, you can also learn from the Web, it’s represented at www.Heritage.org, the website. Rick Sellers, by the way, from Cedar Rapids. He’s a station owner, representing 1450 AM, KMRY, or as they call it K-Memory.

RS: We have a website.

GT: You do have a website as I know I’ve seen on the pictures of your staff members on the web. Could you tell us the web address?

RS: www.KMRYradio.com.

GT: Okay, so we’re even there. Now, we’ve established that the programming is out there. It exists 24 hours, or more or less.

NJ: I disagree with that.

GT: Why is it a problem. Nick Johnson, I’d like to go to you now and ask you why it’s a problem that some of those network, some of those channels that we watch are owned, perhaps, by one owner who’s not here locally?

NJ: I think it’s terribly important that we distinguish what I call “matters of right” and “matters of grace.” You may send a letter to the editor, an Op-Ed to the newspaper and they publish it. You may appear as a guest on a show, as the three of us are doing now. The point is the restrictive power that rests with that owner to exclude, to use that power for political purposes, in the way that Tim raised as a problem when he called. Because there are thousands of ways in which a mass media owner can affect an audience’s political attitudes and even voting practices—as with Clear Channel’s efforts to boycott the Dixie Chicks. So this has an impact on creativity in the community, as well as politics.

But as for the diversity of points of view in the media’s coverage of the Iraq War, I felt compelled to put as a link off of my website, www.nicholasjohnson.org, a list of newspapers around the world that have websites. And I think when you look at them, you will conclude as I have that we got an extraordinarily narrow range of views with regard to the Iraq War. The media essentially turned it into entertainment, media performing a cheerleader function, and not at all exploring the issues that were out there. The British press and on-air media were quite prepared to do this. They were as involved in the war as we were, they had as much need for a propagandistic cheerleading as we had, yet they presented a range of views.

And, certainly, if you read around the world from Le Monde in Paris to the Asahi Evening Shimbun in Tokyo, you see a tremendous array of views that simply never show up in American media. So I would differ with the view that there’s a great range of view out there. I would say it runs from center to far right, and I suspect if I may again speak for James Gattuso, he would probably say it ranges from far left to center. But I think we could probably, I would hope, we could both agree that the range is relatively narrower than is good for a democracy.

JG: If I could respond to that.

GT: Sure.

JG: Dixie Chicks. I hear that mentioned a lot. I don’t know where the idea comes from that some corporate conglomerate stopped playing their records. I admit, I listen to country music. I think I know country music fans. They did not want the Dixie Chicks played. It’s a very Pro-American, patriotic, conservative, frankly, audience that were offended by what they said. I don’t know whether – I wasn’t part of the group saying that they shouldn’t be played. But that was a grass roots movement and part of the expression of the consumer’s freedom of speech.

GT: You know, James, what they said, by the way? I haven’t heard of it.

JG: The way I understand it is that one of the lead singers said she was ashamed to be from Texas because George Bush was from Texas. And that truly offended a lot of people.

GT: From Texas.

JG: Across the country. That was clearly not something that was some corporation imposing on the country music fans. They have a strong point of view there.

But to get to the other point, the Iraq War.

We do hear that there’s a narrow range of views. And I think that everyone believes that the range of views in the media was not broad enough when it doesn’t cover their view. I feel that way a lot. I’m sure our other speakers feel that.

But when you look at what was on television and cable, in particular, I find it very hard to say that everything’s the same when you have Dan Rather and Geraldo Rivera, when you have Erin Brown and Tom Brokaw. These are very different people with very different philosophies. You have Fox and you have CNN. You have a station owned by Rupert Murdoch and a station founded by Ted Turner. This is a range.

But even going beyond that, the Internet is a powerful force. Your guest just mentioned all the different websites, all the different things that are available on the Net that you can read about. I know people that are watching French TV, I know people that are watching Al-Jazeera, I know people that are watching or reading Matt Drudge. And remember, these are not minor players. Or the Internet isn’t a minor player. The Internet did, after all, break the Trent Lott story, broke the Monica Lewinsky story. This has an effect.

One figure I can throw in here. Peer Research did a study on where people were getting their news from the Iraq War. Half the American public has access to the Internet. It’s getting bigger all the time. It’s close to 60% now I think. Of those, one out of six, a substantial amount, one out of six saw the Internet as their primary source of news. Not just one of many, but one out of six of the people who have the Internet saw it as their primary source of news. And we’re still in the infancy of the Internet. People have broadband yet. This is only going to get bigger. We’re on a trend towards having nearly limitless diversity. It doesn’t mean that people will be watching a thousand stations, there will be preferred stations, some will have better programming than others but that choice is out there.

NJ: But I would ask, why did they feel the need to go to the Internet?  And I would contend that’s because of the limited range of what they could get from American media.

The problem with boycotting the Dixie Chicks is not that an individual member of the audience or a station owner shouldn’t have the right to do that. It’s when you put 1,200 stations in the hands of one licensee that you create the kind of political power we’re talking about.

Now I can find you radio stations where you can listen continuously throughout the day to Rush Limbaugh, followed by Gordon Liddy, followed by Ollie North, followed by Michael Ragan, followed by Michael Savage.

I cannot find a station on the air anywhere in America, of which I am aware, where you can listen to Jim Hightower, followed by Molly Ivins, followed by Jesse Jackson, followed by Ralph Nader, followed by Noam Chomsky, followed by Howard Zinn. If you know of such a station, please tell me about it. That’s the problem in terms of the leaning of the station owners, who are, by definition, are business people. They tend to be conservative, they tend to be Republicans.

JG: Wait a second. They’re business people. Business people are interested first in making money. That’s denigrated a lot, but in this case, it means that they will put on the programming that people will listen to.

NJ: It doesn’t help in making money to be critical of the President of the United States when you’re a licensee.

JG: Hopefully you don’t have to worry about that at the FCC, and the government doesn’t have control over your ownership. We’ll move on from that.

These guys will put on whatever people want to listen to. And there have been plenty of liberal commentators who have tried. I listen, in fact, to Sam Donaldson every morning here in Washington. But Mario Como had a show for awhile. There’s been lots of liberal -- I put that in quotes – because you know liberal talk shows that have had their shot, and people just are not listening to them. I’m not saying that there’s more conservatives than liberals in the country, maybe conservatives for some reason are listening to radio and liberal aren’t, I just have no idea. But it certainly is not the case that radio owners, as a group, have not been putting these things on.

RS: Let me speak from the standpoint of a station owner. Sure, I love profit. I have nothing against the bottom line, but let me go back to the meeting that I was at where they said, “Look, we don’t care about Main Street, we care about Wall Street.” And that bothered me greatly.

And so now these corporations that own all these radio stations—and, again, I’m not a television person, really—but if you go to Tampa, Cleveland, Denver, you find eight stations, for example, that used to be almost all individually owned now under the same roof with one news person writing the same newscast that you hear on all eight stations in each of these markets.

GT: I would like to remind our listeners that this is Iowa Talks, and that they can call in by dialing 466-9100 locally, that’s 466-9100. We’re talking about local listeners, and this is the time to come in, actually. And 1-866-780-9100 toll free. 1-866-780-9100. You can also e-mail us; WUSI@uiowa.edu is our e-mail address.

Let’s continue talking about the new FCC regulations that passed on Monday. I hear a lot of talk about things that happen in courts, and that the decision was actually preceded by court rulings. Have you guys, have you heard anything about this, have you any comments concerning this part because nothing is coming from nowhere and apparently there has to be some reason for any decision. People complaining that there’s a cap, and that cap keeps them legal.

There are some stations and some entities that are grandfathered into this situation, such as the Tribute Company in Chicago, but in other cases, what happens in courts?

JG: Well, what happened was there were many rules at the FCC revised this week, but two of them, the two involving ownership of television stations, multiple ownership of television stations, the existing rules have been overturned by courts -- going back I think it was last April and May, in that range – on a number of grounds, but generally because, first, the court said that the FCC had not properly presented a justification for their rules. In other words, they said for instance, federally, that the 35% cap was an arbitrary number. The FCC simply said, “Yeah, if we can get three out of five votes with 35%,” but there’s no basis for that. And in order to get over constitutional scrutiny, because we are dealing with the media and First Amendment concerns, these decisions need to be fully justified.

Another point they raised was that the impact of that non-broadcast voices have not been properly considered, that the FCC—and that’s the point I’m making too—that the FCC looked at the number of broadcasters, radio and TV station broadcasters in the market, but didn’t consider the impact of cable, did not consider the impact of the Internet, of other technologies. So they sent it back to the FCC and said, “Either justify this or get rid of the rules.” Frankly, no one has seen what the full FCC justification for the new rules is yet. But I think the battle—certainly it will go back to the courts—I think the battle that’s coming will be whether the FCC went far enough. I think there’s a very good possibility the courts will look at these new rules and say, “Yes, you modified them, but still, your justifications are not strong enough to overturn the First Amendment, and we will return them again.” I think that’s a real possibility.

GT: I have news from the control room, here, we’re not receiving the phone calls from our listeners. So please e-mail us if you have the possibility: WUSI@uiowa.edu. Real quick, Nick Johnson, and your response?

NJ: Yes. Oh, just one quick question, James. Was Robert Pepper there when you were?

JG: Yes.

NJ: Yeah, he’s a former University of Iowa Communications Studies Professor, so I thought it might be relevant locally that you had worked with Bob.

JG: Robert Pepper was actually my boss; I was his deputy.

NJ: That’s what I thought; he was Chief of Plans and Policy.

JG: He was a wonderful person. He just instituted the non-partisanship at the FCC. He’s been there now through two Republican and two Democratic chairmen. He’s a real asset for the Commission.

NJ: I would just like to put in a word about how this thing began and what the standards originally were because, at the time what became the 1927 Radio Act was being debated on the floor of the House, a Congressman from Texas, Luther Johnson -- so far as I know related neither to me nor Lyndon Johnson), was speaking to the issue of ownership. And he said, “If we should ever allow such a great political power as broadcasting to fall into the hands of the few, then woe be to those who would ever disagree with them.”

Well, I would say, woe be to us, indeed, and how extraordinarily prescient that fellow was back at a time when radio was a black box and a total mystery and nobody had any idea how it worked, let alone what it was going to become.

But in the early days the idea was, in most countries, broadcasting was seen as having too much potential to turn over to commerce and too much political power to be put in private hands. But the model we used in this country was to permit individual citizens to be licensees in exchange for their public service. The FCC had the concept of “integration of ownership and management,” and what that meant was that the FCC envisioned a licensee would have but one station and that they would live in the community, they would own the studio and transmitter and antenna tower, and operate the station, and really know that community.  I think that’s still a good principle. In any event, that was the original idea, and that is what has been eroded over time.

But the standard is still there that the licensee is to serve the “public interest, convenience and necessity.” I would say that puts the burden of proof on those who—or at least this is what I said as an FCC Commissioner—that puts the burden of proof on those who want to acquire more properties, whatever, to show how the public interest is better served by this. The burden should not be on those who wish to prevent the acquisition to argue what harm is coming from it, it’s to argue, “Why is the public better off as a result of this?” And it’s very hard to come up with those arguments, I think.

GT: We have three phone calls, and the problem is gone, so let’s take a couple of phone calls before we come to the end of the program. Here’s Jerome from Cedar Rapids. Go ahead, Jerome, you’re on Iowa Talks.

Jerome: Hi.

GT: Hi.

Jerome: I’m happy to have this topic on. I’m an AM radio listener, and so this is a subject pretty dear to me, and it’s good to have Rick on. I second his comments about the sameness of radio as you travel across the United States; it is becoming much the same, which is unfortunate. And one of the things that frustrates me about the conversations is the role of cable and the Internet are both emphasized so much, but I think that it gets us away from the fact that these are public airwaves and we’ve got a right to maintain broadcasting as an entity that stands alone. I am not a cable subscriber, so I think that since these TV stations are broadcasting on public airwaves under public license that I’ve still got a right to expect a full spectrum of opinion and ownership.

GT: Okay, thank you, Jerome. Here’s Nick Johnson.

NJ: Let’s just go to the next caller.

JG: If I could just respond for those people, 89% of the public does have cable, so that’s a real consideration for the vast majority of people, but what these rules do by providing more flexibility to broadcasters and more ways to support their operations, cross-ownership of the newspapers, operations, it actually protects free, over-the-air broadcasting. I think people who don’t have the choice of cable or have chosen not to subscribe to cable are actually better off with these rules than without them. Otherwise, they may be losing these broadcasters and not have the choice of the over-the-air broadcasts.

NJ: And, obviously, Rick and I disagree, but let’s go to the next caller.

GT: Jeff from Quincy, Illinois. Jeff, you’re on Iowa Talks.

Jeff: Hi. The effects of cable and satellite to enhance competition has been overstated. The companies don’t allow you to subscribe to a premium channel without getting basic, and you can only get basic if you accept an anti-competitive bundling of their choice. So you’re forced to pay for programming you don’t want, and some of that programming is held by the major networks and other media conglomerates. Comment, please?

JG: Well, some of it’s held by major networks, but first off, there’s many of them and not all of it is. I did a little survey of my own—I get Cox Cable at home, so that’s broadcasting—I have, it was a typical morning the other day, 13 news channels that were on about 7:00 AM in the morning. Commonly owned, yes, a lot of them were. When you take out the commonly-owned ones there are eight, that’s eight competitors out there without even getting on my computer and going on the Internet. Eight is five more than they would’ve had 20 years ago. This is an increasing trend of diversity, not a decreasing one.

GT: Jeff, thank you for your question. Let’s move on to Nick Johnson for a comment if he wants.

NJ: Well, I would just say, once again, this is the content and conduit problem. If you would separate the ownership of the programming from the ownership of cable distribution or satellite, you would have far fewer of these problems.

GT: Ed from Iowa City is joining us now. Ed, you’re on Iowa Talks.

NJ: Thank you very much. I’ve been trying to get in for some time.

GT: Thanks for your patience.

Ed: Okay. I’m an ex-broadcaster. I was in the broadcasting business 30 some years, small market and rather large market, independent ownership and groups, and I owned several small stations myself. And there are a number of things that I would like to cover, but hopefully, I guess I’m the last caller, maybe I can just take a few minutes.

GT: There is one more; go ahead.

Ed:  If your guests don’t mind, what I’d like to do is take this in a little different direction for a moment, and ask them to comment on something that really bothers me.

I don’t believe that the Federal Communications Commission, as it is comprised today and in the past at different times, has a real clear vision of what their purpose and mandate is. My belief has always been, when I was a broadcaster and now retired today, is that the Commission’s role was to support as an advocate of the public, and not as a market advocate, and not driven just by particular court decisions, that in some decisions that seem to go against the public interest, which to me is giving as many diverse voices as possible to the public, they have taken the other stand—and I listened to the Senate hearings last night and one of the commissioners, the woman on the commission, said that it wasn’t their duty, as they understood it from the mandate from the Senate and legislation over the court decisions to give a maximum number of diversity of voices but rather the minimum number of voices that would allow them to get past the court.

GT: Okay.

Ed: And that, to me, is a complete opposite of what I see in the Communications Act and the general public’s opinion about broadcasting.

GT: Okay, let’s hear a couple of quick comments, or maybe one.

NJ: I agree with the caller. James?

JG: I think it’s Cathy Abernathy that said that. She’s on the Commission. I think her point, and I worry about this a lot, is do we really want a maximum of diversity that could mean every station in America is a “mom and pop operation”? That’d be nice, you might have the choice of a hundred channels, but no one’s going to cover the Iraq War. No one’s going to have people in Baghdad, no one’s going to have the resources to provide what you need.

NJ: The Associated Press.

JG: The broadcaster’s people. That’s what we want.

NJ: The Associated Press did it for the newspapers, and I think those things, under your marketplace theory, would certainly rise up to serve those stations as it has in the past.

RS: When we go back to it, I mean back to the 20’s, 30’s, even 40s’, that’s what the networks were: CBS, NBC, ABC and all that. The radio networks provided the news coverage. Sure, you’re going to cover a war, and then you go back to local coverage.

JG: And there was only three of them. Right now we have many more than three. That’s my point, that we have a better system now than we had then.

GT: Here’s Bob from Cedar Rapids real quick. Bob, your question? You’re on Iowa Talks.

Bob: I think that we really have a big problem when Bush invited in a bunch of newspaper reporters and most of the news anchors in to preview his State of the Union speech and there was no outcry on that. Talking about not having any independents, and also this fiasco of Bush flying in and landing on the aircraft carrier. This was taken, there was very little news coverage in terms of anybody being apparently appalled at this type of show.

GT: Answers, quickly?

NJ: Again, I agree with the caller. I think that’s part of the problem, and the fewer media owners we have the worse it gets. It’s like Mussolini’s Council of Corporations. The fewer companies you have to deal with as a political party or as President of the United States, the easier it is to control and manipulate, the more likely it is that they will be your major campaign contributors. And that’s exactly the problem we have that happens now to involve a Republican administration, House and Senate, but in the future could just as well be the Democratic Party if it ever rises up out of its early death.

JG: Do you think the White House news corps is not—antagonistic’s the wrong word--but not eager to find fault with the presidency? You haven’t been watching it closely over the past few decades. I’ve been to the White House briefing room. Just look at the chairs, look at the desk, there’s a lot of reporters there from the smallest to the largest chain. There’s not one conglomerate controlling that. It’s a challenge for the president, it’s a challenge for the press, but they go at each other pretty hard.

RS: Something Professor Johnson said, though, at the beginning of the show and I agree with him. Okay, let’s say one company owned all the media. That’s fine, if that company allows their local management to operate, indeed, locally and autonomously, and serves the community. That would work.

GT: Thank you, Rick. Thanks, James Gattuso. Thank you so much for being on the program today. We ran out of time already. Thank you, Nick Johnson for coming into our studios.

Our program was produced by Holly Hart, with help from Sue Bruell. Our chief engineer is Jim Davies, and Iowa Talks will be back again tomorrow with another edition of Live from the Java House. Until next time, I’m Gayane Torosyan.