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Does "new media" mean end of spectrum scarcity?

-------- Original Message --------
Subject: 	CEI's C:Spin - A Digital Manifesto: New Media Transforms the
Ownership Debate
Date: 	Mon, 20 Jun 2005 13:49:29 -0400
From: 	Richard Morrison <rmorrison@cei.org>

*This issue –**** A Digital Manifesto: New Media Transforms the
Ownership Debate*

*Issue No. 179  *

*By* *_Daniel Corbett_* <mailto:dcorbett@cei.org>**

*Charles G. Koch Foundation** Fellow *

*_Competitive Enterprise Institute_* <http://www.cei.org/>**

*June 20, 2005*

A spectre is haunting the airwaves—well; it’s not even on the airwaves.
It transcends it. It is a new and creative force that continues to
expand exponentially and scoffs at the phrase “limited spectrum.” This
spectre is new media.

On June 13, 2005 the US Supreme Court declined to hear the predominant
case on media ownership,/ Prometheus Radio v. FCC/, which had been sent
up from the Third Circuit Court of Appeals last summer. The High Court’s
declination means the decision will fall back into the hands of the FCC.
The FCC must now act in accordance with the guidelines contained within
the Third Circuit court’s opinion.

_New media_ <http://en.wikipedia.org/wiki/New_media> (Internet
publications and blogs, digital television, and satellite radio) have
revolutionized the way we communicate and made it a more engaging,
democratic, and rich experience. They provide people with a wide range
of voices, many times a refreshing alternative to traditional media.

The presence of these new media should change the way we look at the
current debate over media ownership. The ongoing digital revolution is
creating a vibrant journalistic world that exists, thankfully, outside
the ambit of government regulation. No longer is it necessary to see the
debate as a simple dichotomy with “big media” on one side (deregulation)
and “media diversity” on the other side (regulation). This way of
thinking is stuck in the analog world. The digital world is much more
complex—and it requires a new way of thinking about media ownership.

*The Ruling and Its Discontents*

In August 2003 the FCC loosened media ownership rules, some of which had
been in place for since 1975. The ruling raised the ownership limit from
35% to 45% for television networks and allowed the same company to own
both the major newspaper and the major television station.

Then, in June 2004, the Third Circuit Court of Appeals held a hearing to
examine the FCC's revisions. The court did not rule on the outcome of
the FCC’s decision, keeping the decision in tact. Rather, the court
focused on the rationale for the decision, _arguing_

that the FCC needed to reexamine its methods for dealing with media

The court found three problems with the FCC’s analysis of the reach of
various media, which it termed the “diversity index”:

·       The diversity index required that all media outlets should be
counted the same.
·       Too much weight was given to the Internet as a legitimate news
·       The diversity index was never released to the public.

There is some merit to the court’s argument. The diversity index was not
a realistic measure of a media outlet’s reach— its requirement that all
media outlets be weighted equally undoubtedly obscures some of the
Commission’s findings. For instance, under the current diversity index,
a student publication at a small liberal arts school would be counted
the same as the/ New York Times/. Also, the FCC would do well to show
openness and make public the diversity index it has compiled.

The FCC was justified, however, in making the case that Internet
journalism has fundamentally changed the media landscape. And journalism
has not only been transformed by the Internet, but by various new
technologies—satellite radio, digital television, wireless technologies,
etc. This changing landscape—one in which media is freer, more
specialized, and more democratic than ever before—calls for an updating
of our archaic media laws.

*New Media is Both Diverse and Local*

Technology allows for more localized and relevant forms of journalism.
In a _spring 2004 article_ <http://cjr.org/issues/2004/2/hickey-tv.asp>,
Neil Hickey, editor of the _Columbia Journalism Review_
<http://www.cjr.org>, argued that digital television, contrary to
popular arguments, often allows journalists to focus more closely on
local news. Hickey points to a case in North Carolina in which
NewsChannel, a digital outlet of WRAL-Raleigh, ran live, complete
coverage of the murder trial of a well-known local figure. This, Hickey
said, was a “story of broad local interest, but one for which the
station would not have preempted popular CBS shows on its lone analog

Digital networks like NewsChannel are able to provide such specialized
coverage because they operate under a virtually infinite broadcasting
spectrum, as opposed to the limited spectrum under which traditional
broadcasters operate. It is clear that new media are providing viewers
with more, not fewer, stories of local interest. Deregulation augments
new technology both by allowing open competition among media and by
freeing up large networks to aid in the development of new technologies.

The Internet allows journalists from traditional platforms (newspapers,
radio, TV) to provide more detailed coverage and to do so in an
instantaneous, two-way forum. In many ways, Internet news is more
thorough, given its endless capacity, and more democratic— readers can
cross-check their news and engage in dialogue with journalists and other
readers through email and discussion boards.

New technologies have reshaped journalism into an amorphous, interactive
experience that would be unrecognizable to Hearst or Pulitzer. In fact,
many journalists have already begun _lamenting_
<http://www.csmonitor.com/2005/0425/p02s01-usgn.html> the death of the
traditional newspaper.

It is clear that human innovation has created new, if not preferred ways
of reporting news in the forms of the digital broadcasting and Internet
journalism. But the question remains: are new media a viable alternative
or will people keep getting their news from the sources they are used to?* *

*Media Substitution and Accessibility *

In a _study_ <http://www.tprc.org/abstracts00/empirical.pdf> at the
Wharton School at the University of Pennsylvania, Professor Joe
Waldfogel found that people regularly substitute freely among Internet,
broadcast TV, and newspapers. _Nielsen/NetRatings_
<http://www.netratings.com/> recently reported that 21 percent of Web
users who read newspapers have transferred "primarily" to online news
sources. People/ will/ use the Internet as a source of news, but this
leaves open the question of whether people/ can/ use the Internet.

Internet access, particularly broadband access, has become a hot topic
in contemporary discourses on media. But as technology evolves, we
continue to get closer to realizing better access to online content.
According a _September 2004 study_

released by the _Center for the Digital Future_

at the University of Southern California’s Annenberg School for
Communication, 75 percent of Americans go online. Among these people,
most say that the Internet is their primary source of news-related
information.* *

*Creating an Atmosphere of Freedom*

Our laws governing media ownership are stuck in the analog world, when
media was limited to paper, ink, and airwaves. This is the digital
age—where news from Bangalore to Baltimore streams 24 hours a day, where
communication is instantaneous and effortless, and where the definition
of journalism _changes_
every day. This sort of creativity and innovation require an atmosphere
of freedom. The social benefits of the digital age can only be realized
under a set of rules that encourage competition—both among traditional
media and with new, emerging forms of media. This is the best way to
provide people with diverse, localized, and high quality media.

The FCC should carefully consider the outcomes of the ruling it will
make. The diversity index should be reexamined and made public. It would
be a mistake, however, for the FCC to de-emphasize the Internet’s
increasingly important role as a media actor. If we desire a vital and
diverse media, our ownership laws need to move out of the analog world
and into the digital age.

Posted by Declan McCullagh on Jun 21, 2005 in category economics

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