Although this post is mainly about the FCC’s cross-ownership ban, the last paragraph deals with a fictional company that wants to become involved in the newspaper and television industries. As a possible player in both industries, they must take a stance on the FCC’s ruling.
In 1975, the Federal Communications Commission (FCC) adopted a rule prohibiting companies from owning both newspapers and broadcast television stations in the same market. The rule first received consideration in the early 1970s when the U.S. Justice Department was investigating newspaper consolidation. The Justice Department learned that with limited television options, media monopolies were appearing in many rural markets. In an attempt to limit these monopolies, the FCC passed the ruling barring cross-ownership (Wilke, 2000).
Although it has been challenged many times over the intervening years, the FCC has recently moved to throw out the rule in the top 20 U.S. media markets. Legislation has been introduced by Sen. Byron Dorgan and backed by Sen. Hillary Clinton and Sen. Barack Obama in an attempt to overturn this rule. The FCC has claimed the rule change is necessary to protect struggling newspapers who are having trouble competing in today’s market. Dorgan’s response to this comment is that there is nothing in the FCC’s mandate that requires it to protect the interests of newspapers rather than the American people (Skiba, 2008).
The FCC rule has strong ethical roots. The cross-ownership ban is designed to protect the American public from monopoly-controlled media. When the rule was passed in 1975, most cities only had three broadcast stations and newspapers were still the primary source of news. At the time there were no cable news networks, satellite television, or Internet-based reporting (Wilke, 2000). The situation in rural America has not changed much in the last 30 years, and the ruling has historically been protected by legislators from rural states. For these rural areas, the potential to have all news filtered through one monopoly is a very real possibility.
Ethics aside, there is a legal matter to be considered. In the 1970s, the limited availability of news medium meant that a single company could easily gain control of all news outlets in a single city. The proliferation of satellite and cable television, as well as the Internet, has changed the landscape. Increasingly, Americans in rural markets have access to media outside their local broadcast and newspaper area. Therefore, it can be argued that no single company can possible control a majority of the media in a single location thanks to these other media sources. Sen. Dorgan claims that many of these alternative news sources are merely another mouthpiece for the monolithic media organizations (Skiba, 2008).
Unfortunately, BSSL must take a stance on this matter since it directly impacts business. The recent FCC rule change allows companies to own both newspapers and television stations in the top 20 markets in the U.S. Although the Senate is opposed to this change, there seems to be some merit to it. If there is any evidence of a single company holding all media in an area, the U.S. Justice Department has the ability to act. That being said, BSSL has a responsibility to be forthright with its customers. Although owning multiple media sources in a market allows for better coverage opportunities, BSSL must ensure that customers are aware of BSSL’s involvement. Therefore, BSSL should make every effort to inform customers that the media in question is a subsidiary of BSSL.
Wilke, J. R. (2000). Multi Media: Tribune Co. Deal Puts Cross-Ownership Rule In the Cross Hairs — Foes of Ban on Holding Print, TV Outlets in Same City Say It Is Outdated Now — Legacy of Bluefield, W.Va. Wall Street Journal, p. A1. Retrieved November 4, 2008, from ABI/INFORM Global database. (Document ID: 50995892).
Skiba, K. (2008). Senate Committee Votes to Overturn FCC Cross-Media Ownership Rules; Both Hillary Clinton and Barack Obama are among the cosponsors of the measure that now heads to the full Senate. U.S. News & World Report (April 24, 2008).
Ferrell, O. C., Freadrich, J., & Ferrell, L.. (2008). Business ethics: Ethical decision making and cases (7th ed.). Boston: Houghton Mifflin.