Justice Oliver Wendell Holmes famously wrote that the best test
of truth “is the power of the thought to get itself accepted in the
competition of the market…” But today many are turning away from
this theory, calling for greater government intervention in media
ownership over the perceived lack of fairness in the press.
Senator Byron Dorgan (D-ND), a vocal critic of the free market
for ideas, recently stated, “We really do literally have five or
six major corporations in this country that determine for the most
part what Americans see, hear and read every day.”
Unfortunately for the Senator, we really don’t. According to Ben
Compaine, author of Who Owns the Media?, from 1985 to 1995
the top ten media companies went from raking in 38 percent of media
revenue to 41 percent — not exactly the kind of mass consolidation
the pundits would have you fear.
But revenues — the traditional means for measuring media market
diversity — are not the best way to gauge the diversity of
opinions in the American marketplace of ideas. With the advent of
the Internet and the new national pastime, blogging, media revenue
models are being completely redrawn.
Arianna Huffington’s aptly named Huffington Post claims
to draw in 4.7 million unique users a month (Nielson estimates show
about 1.5 million). Fortune has quoted an unnamed source
estimating that Huffington can expect her team of less than 50
staffers to haul in $7.5 million this year.
Compare that to the other post — the Washington Post.
The Washington Post Company reported that in 2007 the Post
took in a comparatively whopping $496.2 million in advertising
revenue. Yet its average daily circulation totaled 649,700, half of
Nielson’s conservative estimate of Huffington’s reach.
Lean, web-based companies — which have much lower operating
costs and use far fewer dead trees to disseminate their ideas —
are left underrepresented in current media market measurement for
no other reason than their relative efficiency. If we substituted
eyeballs reached for dollars spent the already robust picture of
the media market would show even less evidence for concern.
STILL, MANY BELIEVE there is need for regulation because Americans
still receive the bulk of their news over the airwaves. Senate
Majority Whip Dick Durbin has said that broadcasters should be
required to give both sides of political issues to listeners, while
Senator Dianne Feinstein (D-Calif.) has said she plans to look into
reviving the “Fairness Doctrine.”
The doctrine, abandoned in 1985, placed political speech by
broadcasters under the scrutiny of the Federal Communications
Commission. FCC regulators mandated broadcasters “make reasonable
judgments in good faith” on how best to present all sides of
controversial issues.
Conservatives on Capitol Hill have banded together to oppose
such a revival of the doctrine while pundits and free speech
advocates have railed against the reinstatement of rule, citing the
1984 Supreme Court decision that noted that the Fairness Doctrine
had a “chilling effect” on speech.
While it’s true that the Fairness Doctrine did result in many
broadcasters shying away from political speech altogether, few have
been quick to point out the obvious flaw in Durbin and Feinstein’s
thinking. Replacing the marketplace of ideas with a board of
overseers doesn’t do anything to rid the world of bias. It only
empowers the bias of the overseers.
Economist James Buchanan clinched the Nobel Prize in 1986 for
his keen observation that human beings don’t check their
self-interested ways at the door when entering the halls of
Congress or the offices of any of Washington’s many bureaucracies.
Instead, commissioners and congressman alike act to advance their
position, accrue more power, and expand the mission of their
respective offices.
This is especially true of the FCC. The commission, created 80
years ago to regulate the fledgling radio industry, now regulates
nearly all electronically disseminated media to some degree. But
the recent explosion of choice in the media marketplace has left
the commission grasping at straw men.
Worse yet, its most recent round of regulations seek to solve
its own bad rules with additional layers of rules. Rather than
freeing the airwaves from restriction after restriction, and
thereby increasing broadcast competition, it seeks to dictate what
can be said and who can say it. Instead of opening up the Internet
to more service providers, it seeks micromanage the global
network.
Most recently it has attacked cable providers’ ability to make
private contracts and now seeks to make termination fees for
violating any communication service contract illegal. The
commission isn’t just seeking to regulate wireless and wired
transmissions, but the fundamentals of the marketplace itself.
Were the FCC given the power to police political speech for any
lack of fairness, it’s safe to assume that violations would be
found in droves, because that’s the whole point of the agency.
WITH A DEMOCRATICALLY controlled Senate and potential Democratic
White House in 2009, current commissioner Michael Copps may soon
hold the title of chairman, giving the FCC a 3-2 Democratic
majority.
This should be pleasant news for Senator Dorgan, whom Copps said
has, “Struck a blow for localism and diversity in a media
environment crying out for more of both.”
Copps is right — in at least one sense. Consumers are crying
out for diversity and local content and getting more of both
in spite of government regulations.
A Chairman Copps is the last thing the American media market
needs. Instead, it needs an Alfred Kahn for the digital age. Kahn
dismantled the corrupt and anti-consumer Civil Aeronautics Board,
earning him a coveted place in history as the final chairman of an
unnecessary agency.
Channeling Justice Holmes, Kahn once remarked when speaking
about his victories at the CAB that “The key point is that the
market decides, not a bunch of know-it-alls in Washington.” That’s
true for airlines and doubly true for free speech.
