Media Monopoly

An interview with Nicholas Johnson

Nicholas Johnson, former FCC Commissioner and author of How to Talk Back to Your Television Set, currently lectures through the Leigh Lecture Bureau and teaches at the University of Iowa College of Law.

Multinational Monitor: Is concentration in the media markets something about which citizens should be concerned?

 Nicholas Johnson: At the time of the Time-Warner merger, when company executives were asked why they were merging, they said that according to their calculations, it would not be long before there would be five firms that control all the media on Planet Earth, and that they intended to be one of them.

It's not yet true that there are only five firms that control all the world's media, but it is true that there are six firms that control over 90 percent of all the world's music. The trend clearly is in that direction.

There is now not only no objection to people owning more and more newspapers or owning more and more broadcasting stations, there is also no objection to the merger between publishers of magazines and books, television networks, video cassette rental companies, Hollywood studios, and so forth.

You now have the phenomenon of the single owner paying money to the writer of the novel in the form of book advance and royalties, and then paying the screenwriter to write the feature film which is produced at the owner's Hollywood studio. The owner's magazine does features about actors, producers, directors and other celebrities and otherwise promotes their movie, while the same person or corporation owns a television network that has the late night talk show on which these folks appear as guests; they own the theaters in which the movie is shown; they own the cable networks on which the rerun is provided; they own the pay-per-view services where people watch it in hotels; and they own the video rental stores where others go to rent it. So, you have created the possibility of an incredible multi-media, multi-national hype of a product which left on its own might very well have gone nowhere. More and more, this dominates what we're going to be reading in books, seeing in feature films, reading in magazine articles and so forth.

MM: Why should consumers care if there are only a half dozen or a dozen big media firms? Aren't the big companies still going to be disciplined by consumer buying power?

 Johnson: To some extent they will be. But the point is that hype has an enormous amount to do with bottom line. That's why manufacturers of all kinds of goods, not the least of them media products, spend billions of dollars on advertising. Through advertising, you can, in fact, shape and manipulate and encourage consumer buying patterns.

If you take out a multi-million dollar ad campaign on television for a movie, you will probably have a lot more people showing up at the movie theaters to watch that movie than if you released the movie and relied on nothing but word of mouth. That's sort of intuitive and obvious on its face.

That doesn't mean that you can take a real loser and blow it up into a success, but it does give you a tremendous advantage going in with whatever product you happen to have.


MM: What kind of impact will media concentration have on the diversity of ideas that are presented? Won't there still be smaller outlets able to air a wide range of ideas?

 Johnson: Sure, and that has always been the case. There are some 50,000 books published each year in the United States. There are probably 30,000 to 50,000 periodicals available, and if you happen to be in a community where there is a large university and you have access to the periodicals room of the library at that university, you have access to a wide range of material. Even if you live in the most remote place in America you can still get subscriptions by mail, or the Internet, to a wide range of publications that will bring you a diversity of views.

But it is also true that most people get most of their information from television. It is also true that fewer and fewer people, particularly young people, are reading newspapers. Of those who are reading newspapers, most are reading local papers which are newspaper monopolies and which have very little in them besides supermarket ads, AP wire copy and some report on the high school football team.

In the United States, we probably have theoretical and potential access to one of the widest and most diverse ranges of views of any nation on earth. There are countries of course where satellite receivers are banned; where there is close watch by customs over printed material coming into the country and so forth. We don't have those problems.

But the fact is, the largest proportion of folks are getting their political insights from Rush Limbaugh on radio during the afternoon, and Jay Leno during his opening stand-up monologue at night. They are not reading the wide range of publications that are available, or listening to Pacifica Radio if they happen to be in a community where it's available, or reading the Multinational Monitor or whatever. So, when you're talking about what the American people as a whole have learned from all the available information when they vote or make a consumer choice or express an opinion on an issue, the range is pretty narrow.

MM: Will there be any expanded genuine competition with the entry of telephone companies into the television and cable markets, and the general inter- and intra-industry competition in the television, cable and telephone industries that appears on the horizon?

 Johnson: Quite the contrary. The relevant issue is not how many competitors are in the marketplace. The relevant issue is what the rules are regarding entry into those oligopolistic channels of communication.

When we had one telephone company, AT& T, that controlled everything from the telephone instrument on the desk to the cables to the switching stations, the company was subjected to a lot of ridicule - think of Lily Tomlin's routine ("We don't care, we don't have to, we're the telephone company") - and some serious criticism, but nobody ever criticized the phone company because of the threat it posed to the diversity of ideas.

The reason for that was the ground rules - the law, expectations, practices and experiences - that were put in place. The first rule was that anybody who wanted a telephone could have one. The second was that anybody who had a phone could say anything they wanted over the phone; and any liability that came about did not come about because of enforcement by the phone company. You could be prosecuted for dealing in national security secrets or stalking or fraud or child pornography or drug dealing or whatever, but you were not going to be prosecuted by the phone company. You were being prosecuted for what you said by somebody outside of the communications system.

The media reform public interest advocates went to the newspapers and argued that there ought to be a similar right of entry into the newspaper; somebody willing to buy space in the paper ought to be able to do so and to say whatever they want to say. Jerome Barron published an article in the Harvard Law Review, and later a book, in which he argued that, at the time of the adoption of the First Amendment, the conception was of folks visiting on the village green and tacking up notices on barns and trees and publishing lots of little one-page newspapers. Today, by contrast, we tend to have monopolies in newspapers. Therefore, if we are to have the same kind of open accessibility to a range of views, the argument went, we have to give individuals a legally- enforceable right of entry into those monopoly conduits. Unfortunately, we lost that argument.

The state of Florida passed legislation essentially providing that right of access to newspapers, and the Florida Supreme Court upheld it. But the U.S. Supreme Court overturned it. They said, "It is the newspaper owner that has the First Amendment right, not the citizen seeking access, and that First Amendment right to speak includes a right to censor."

Then we went to radio. A group called Business Executives Move for Vietnam Peace went to Katherine Graham's [the owner of the Washington Post's] radio station in Washington, D.C., WTOP, and said, "We have a little clip we'd like to put on. We'll pay your commercial rates. It features a general who has decided to oppose the Vietnam War." The station said, "Nope. Sorry. You have the money but we're just not going to let you put that message out over the air." Once again, the Supreme Court said, "That's fine, because the right of free speech includes the right to censor, and therefore the station has the right to censor."

Television stations have this right. Radio stations have this right. Newspapers have this right. Cable television, with a little footnote, has this right.

Now the question is, what about the telephone companies? If they get into the sale of information, aren't we going to have greater choice? I say, no, we're going to have less.

Why do I say that? Because once the phone companies start getting into the information and entertainment business, and they use their own conduits for the transmission of their own material, then it seems to me they are going to be in a position to make exactly the same argument that the Miami Herald made in the Tornillo case, and that WTOP made in the Business Executives Move for Vietnam Peace case. And I don't see how the Supreme Court is going to be able to come up with a basis for distinguishing those other cases from the telephone context.

Then you're going to have the telephone company in the business of deciding who can say what over the telephone system. If they can control what is distributed over the telephone system in the forum of video, then they have free speech rights, which included the right to censor.

It seems to me that if they want to put out voice information (which in fact they already do), or they want to put out data (which they certainly want to), then they are going to be in a position to censor voice and data as well.

Once that happens we will end up with even less freedom than what we have now. Today, the only remaining meaningful media of mass communication available to the American public - that is, media in which we have First Amendment rights we can exercise without fear of content censorship - are the Post Office and the telephone company. Once we lose the phone company, we have nothing left but direct mail.

MM: Before following up on that, could you clarify what you mean by the phone companies putting out voice information and data?

 Johnson: There are lots of informational things you can already get. They may have a time and temperature service. You can call up numbers and get movie schedules. It is a voice informational service where you dial a number and you get information.

It seems to me that if the phone companies are providing that and I go to them and say, "Look, I have my own little message I'd like to get out about these consumer groups that are trying to get organized to fight the telecommunications oligopoly," then the phone company could say, "Oh no, you're not going to put that voice message out there."

You or I offering a message over a voice service, set up by the phone company, would be treated like taking out an ad in the local paper or buying commercial time on a local radio station. The company makes space or time available to other commercial advertisers in the area. You come in and you ask their rate. They give you their rate card and you put your cash on the counter and they say, "Just a minute. Let's look at what kind of message you're going to be putting out." They look at your message and they say, "Oh no, you're not going to put that message out there."

MM: Are you suggesting that this might extend into the private conversation that two individuals might have over the phone?

 Johnson: I don't see why not.

MM: What sort of censorship would you imagine taking place in that context?

 Johnson: Well I think it could be any possible censorship.

Remember the song called "Cop Killer" that the singer Ice T put out? There was Time-Warner with multiple industries in which it is dominant, one of which is music; within that are a number of recording companies; within that is one company for which Ice T records; within that are a number of CDs the recording company has put out; within that is the one CD that has this particular song; and on that CD is this song. So we're way down the organizational chart. And here's one little song with some lyrics in it that get people upset enough that the likes of Charleton Heston shows up at the shareholders meeting for Time-Warner, police departments all across the country are complaining - as well as the ACLU - and all hell breaks loose.

That's the kind of thing the phone companies are going to be up against when they start making decisions about what can be said and what can't be said.

They don't have the problem so long as they take the position that they are not in the information business - that if you have a beef about something that somebody said to you over the telephone, or some faxes that are coming to you, or whatever, it's up to you to pursue the sender, in courts or the legislature. In other words, the phone companies don't have the problem so long as their position is that they are content neutral, that they just provide the conduit, charging the people that provide the information.

I'm saying I think that would be in the shareholders' best interests as well as in the best public interest, the consumers' best interest and the artists' best interest. It would be in the shareholders' best interest because it gets them out of those kind of very debilitating and profit-sucking conflicts that Warner Bros. got into with Ice T.

Once they say, "We warrant, Mr. and Mrs. America, that whatever comes to you over a line that we control is fit for your family and your home," then if somebody calls me up on the phone and offers to give me a special rate on a subscription to Playboy Magazine, and I think Playboy Magazine is a publication of the devil, I'm going to go back to the phone company and complain about it.

Once they say that, I think ultimately the phone companies are going to be responsible for the content of the voice communication that people get. If you are defamed, if somebody says something that causes you emotional harm and suffering, you might very well want to join the phone company as a co-defendant in a lawsuit because they've taken responsibility for the content flowing over the lines, and you were harmed, or believed yourself to have been, by something that came to you over a telephone line.

MM: To avoid that problem, do you favor keeping the telephone companies out of the cable market altogether?

 Johnson: My enthusiasm runs both for and against once you understand what I'm talking about. And the enthusiasm is equal.

I am enthusiastically in favor of the telephone companies making a conduit available that can handle broad-band communications like television and movies. I think that's terrific. That is, the conduit, but not the content.

I am equally emotionally adamant in my opposition to the notion of the phone companies owning any of the content flowing through that conduit.

So when you ask if I am opposed to the telephone companies providing cable service, Not only am I not opposed, I'm very enthusiastic about an alternative service similar to what we now call cable television, coming to me over conduits owned and operated by what we now call the telephone company. But what I don't want is for the telephone company that is bringing that conduit into my home to also own the programming content, or to own what we today would call a cable company, which packages that programming content into an entertainment service.

MM: Is the sort of thing you are describing the explanation for why Paramount and Warner Bros. started up new networks? So that they could control both content and carrying capacity?

 Johnson: I think so. Right now everybody wants a piece of everything. The phone companies want part of Hollywood. Cable television wants to be able to get into the telephone voice and data business. Microsoft wants to get into the communications networks and banking business. Everybody wants to get into everybody else's business.

MM: What is the position of the FCC on this content-conduit issue, and what would you like to see the Commission do about it?

 Johnson: I don't know whether they are foolish or naive, but when you say that we don't need regulation anymore because we have all these alternative sources of supply, then you totally fail to take into account the need for separation of content and conduit.

If you're going to permit the conduit owner and operator to also own some of the content flowing over that conduit, then you've created an economic conflict of interest for that operator who may gain by keeping competitors' material off, or in some other way disadvantaging the competitor.

Yet that's what the FCC seems prepared to do. They say, "Well gee, we're going to have this direct satellite home service and cable, and the telephone companies are going to provide similar services, and so we're going to have all this competition."

But that is not necessarily so. Just as with radio stations, if you listen up and down the dial throughout most of the geographic area of the United States, you find very little diversity. Why is that? Because radio stations tend to be operated by members of the Republican Party and the local Rotary Club, who are operating them as a business for which revenue is generated through the sale of advertising, and for which they want to purchase programming at the cheapest possible rate.

To get genuine diversity, you need to add to those commercial outlets some alternative services that are funded and operated in different ways, like Pacifica, or National Public Radio, or community radio stations.

In the same way, when we have all these multinational conglomerates operating television services, that does not mean that we are going to get diversity in terms of program formats and ideas.

MM: Especially in radio, but in television too, what is the concentration of corporate media power going to mean for local-content-oriented programming?

 Johnson: In the early days of radio, in the radio conferences in the 1920s and then subsequently in the 1927 Radio Act, which became the Communications Act in 1934, there was tremendous emphasis on localism. There was a limitation on how many stations any one person could own. There was a limitation on how much power any given station could have. There were concerns about the power of networks. There were demands that local stations provide local service, local news, and so forth.

Now we just kind of blithely accept the notion of these new little 18-inch satellite receiving dishes for television programming that is beamed down over the entire nation, which is obviously the 180 degree antithesis of the original congressional conception.

As one member of Congress said at the time, "If we should ever allow such a potentially powerful medium to fall into the hands of the few, then woe be to those who would dare to disagree with them." Of course that is exactly what we are now doing: letting the power fall into fewer and fewer hands, and it is equally true today that "woe be to those who would dare to disagree with them."

One of many consequences of this concentration of power is the loss of localism, because, while it is true that you can get a cable channel via cable television, you can get that programming from a direct broadcast satellite, too. However, there is no way you can get your local over-the-air conventional broadcast television stations, or the locally- originated community access cable channels, from a nationally distributed service.

We see that with the radio stations that are simply picking up a music service off of a satellite and rebroadcasting it with conventional radio transmitter technology out to their listeners. We see it with these direct satellite-to-home services, and we see it with the nationally distributed cable services, and the network services that go out to the local conventional radio and television station.

The result is that we are not getting a local service. The nationally-distributed media are not dealing with local issues. Folks who say, "Think globally, act locally," are going to have a tough time either thinking or acting locally if they don't have the foggiest notion of what's going on in their own community, and they are not going to get it by watching nationally-distributed news and information and entertainment services.

MM: So you believe that something is being lost?

 Johnson: Absolutely. Even if you buy into the Newt Gingrich view of the world that we should dismantle the federal government, and turn government functions back to the states and communities - a vision which I do not share - you have to accept the notion that we simply must have viable, strong, vibrant, thorough, fair, investigative, local media. If we're not going to have federal regulation and federal control, then we need to have more active local participation and involvement, and that requires that people be informed, and that requires that their local media inform them, and that those local media have a capacity for finding out what's going on in the local community.