U.S. Commission on Civil Rights

Minneapolis-St. Paul News Coverage of Minority Communities

Chapter 6

Federal Deregulation of the Telecommunications Industry

According to some presenters at the fact-finding meeting, possibly the most crucial change since 1992 in the local news media has been the effects of years of federal deregulation. Although deregulation is a matter of national debate and importance, the Minnesota Advisory Committee could not do a thorough study of local news media without paying some attention to the matter. The purpose of this chapter is to present some of the opinions gathered at the fact-finding meeting. A more thorough discussion of the deregulation debate, including a review of research studies, is presented in Appendix A.

For many participants of the fact-finding meeting, federal deregulation is really about money and big business. Specifically, deregulation of the telecommunications industry pertains to relaxing ownership rules regarding such items as the number of stations a single television or radio owner can possess in a market and whether or not a single corporation can own a newspaper, or television and radio station in the same market. Historically, deregulation of the telecommunications industry has been done as a result of bipartisan efforts, with the most notable piece of legislation being passed in the 1996 Telecommunications Act (the Telecom Act).[1] Because the relaxation of rules can dramatically change who decides what is news and how news is delivered, the issue is of great importance to Twin Cities communities of color.

Although framing such a complex issue as a dichotomy between two sides is not thoroughly accurate, it is one way of accessing the issue and shall be done hesitantly. Deregulation is generally supported by those who believe the interests of the public are best served when news media owners compete in an economic market, and deregulation is generally opposed by those who believe the public interest is best served when government rules strictly limit the reach of owners of news media. It is fair to claim deregulation of television and radio is strongly supported by large media companies at least partly because most of these companies historically have benefited from such measures. On the other hand, groups whose primary concerns regard the ability of smaller, local news media to control the content of their product have opposed deregulation. Thus, the opponents of deregulation are as disparate as the National Rifle Association, Common Cause, and the American Federation of Radio and Television Artists.

Bottom-Line Journalism

Bill Buzenberg of Minnesota Public Radio spoke for many of the presenters when he said:

I think that the economic pressures have completely predominated. If you can get a larger audience doing X, great, do X. Doesn't matter what it is. This was not always the case. I did a book of history of CBS news during the whole Cronkite era. It was fascinating as to how much they took it as their responsibility to provide information for a democracy, for citizens of democracy. They would say, We get to make a lot of money, but we get to return that with information for society that society needs. I think that whole attitude has changed drastically, and it's now seen as however much money you can make is what counts. To serve the citizens of a democracy with information is not seen as a value. Unfortunately, I think sometimes our government has not put on the pressure and said this is an important part. So like many things in our society, that bottom-line-driven mentality kind of wipes out a public service mentality.

Deregulation has come to mean that local news services can (and must) focus more exclusively on profits than coverage of communities, and particularly communities of color because such coverage is less profitable. Yet, for stations to succeed, they must attract advertising dollars. To attract advertising dollars, stations must attract viewers. Therefore, local news stations have the fiscal responsibility to attract the most viewers they can. Unfortunately, providing news that attracts the most viewers does not necessary mean providing the best quality news. To many presenters, this reality causes the news media not to cover complex cultural issues that are vital to broader understanding, because such pieces are not good for ratings. Minnesota Department of Human Rights Commissioner Janeen Rosas explained, I think there is another factor related to the profit motive driving the media and the consequences of that, and that s the entertainment factor. It seems to me that people tend to like stories that have simple morals, sort of like where there's a clear good and there's a clear distinction. Complexity isn't very entertaining perhaps. The fear of deregulation opponents is based on the assumption that large corporations will pay little attention to any contribution a news program makes beyond its profit margins. This assumption is a matter of debate.

However, the participants are not alone in these feelings. A poll by the Pew Research Center examined how perceptions of news media employees about their industry have been changing. The results appear to show that people in the industry have identified a change since the first round of deregulation took place in 1996. The poll found that Bottom-line pressures have hit television and radio news especially hard. The number of local television people who see a negative fallout from financial strains has almost doubled since 1995, rising to 46 percent in this latest survey from 24 percent in 1995. Similarly, a 53 percent majority of those in national television news now say that bottom-line pressure is hurting the quality of news, up from 37 percent who said so in 1995. [2]

Some presenters echoed these findings in their statement. For example, Bill Buzenberg stated that too many of our colleagues use that [television and radio station] license and see it as a license to make money using the public s airwaves, as opposed to taking on the responsibility that goes with that. Brendan Henehan of Twin Cities Public Television offered this reflection of the effects of deregulation on serving public interests in commercial television:

I think that with many commercial broadcasters, public responsibility has been greatly diminished in the last few decades, and I think that's greatly unfortunate. I think commercial television stations feel much less pressure to do any number of things in the public interest. As somebody who believes in the First Amendment, there are things that I think are attractive about deregulation. But at the same time, acting in the public good, in the public interest, is something that I think has been lost.

As seen in Table 5, with the exception of Hubbard Broadcasting, the owners of Twin Cities television stations are large multinational corporations. Some people fear that these owners will sacrifice the quality and quantity of local coverage of communities of color in order to boost profit margins. Janeen Rosas expressed her perspective of the business of journalism by saying, I heard it said that advertisers are the customers of the media, not the readers, not the viewers, but rather the readers are the product that the media delivers to the advertisers. The stories are not the product. They're the means of delivering the product.

Some participants believed that journalism geared toward profit blurs the distinction between journalism and entertainment. A number of presenters at the fact-finding meeting seemed to agree with former FCC Commissioner Nicholas Johnson who wrote, Profit pressures produce a dumbing down of journalism. [3] Conversely, other presenters, acknowledging that station owners do place a priority on profits, believed that such a setup could benefit communities. They argue it is in the owners financial interest to adequately cover all communities. Al McFarlane, president of Insight News, did not directly address deregulation but reminded the Advisory Committee, The buying power of people of color in Minnesota and it's primarily in the Twin Cities is well in excess of $6 billion a year.

The opponents of deregulation were particularly concerned with the perceived elimination of local public affairs programs. Although no statistics were presented to prove that public affairs programming has declined as a result of deregulation, even representatives of the local television stations implied that it did occur. At the fact-finding meeting, KSTP news director Scott Libin briefly discussed a public affairs program at his station, which is one of the few remaining:

I would also be remiss if I didn't mention that we do have one of those public affairs programs, one of those rare surviving ones. In fact, it's relatively new, an hourlong program, year-round, called At Issue with Tom Hauser that airs Sunday mornings on both our stations. We do it for reasons of the highest journalistic principles. We do it because [owner] Stanley Hubbard said so. It doesn't make any money. Yet, maybe some day it will. But he does it because he believes in it, and we're happy to support that, obviously. If we were a publicly held company governed by a distant board of stockholders and directors, I doubt very much that we would be doing At Issue, and I doubt we would be paying interns. We can because we are locally owned and operated by the same family that put us on the air 54 years ago.

Other participants of the fact-finding meeting argued that news media's concern with profit might end up aiding coverage of communities of color. In one way, allowing a single owner to control more than one station in a given market may encourage more diverse programming. In order not to compete for similar audiences, an owner may develop stations catering to the needs of different communities of viewers.

Presenters argued that ignoring the concerns of growing communities would not make practical business sense. Gary Gilson, a critic of many deregulation measures, recognized the business implications of poor coverage of minority communities: I think that the companies that own these outlets ought to be persuaded that their own economic future depends on the stability and growth of the neighborhoods in their community and the quality of relations between the races. Expanding on this observation, Howard Orenstein, senior policy advisor to St. Paul Mayor Randy Kelly, stated that the large media organizations would have to diversify their programming to survive:

In St. Paul today, cultural minorities comprise 35 percent of our population. The mayor sees that as a very positive thing for the city of St. Paul, but also in terms of this debate, the buying power of people of color and minority communities is steadily increasing, and there's a growing intolerance of the negative depiction of minority communities. This intolerance, the mayor feels, will have a negative impact on the financial survival of the major media outlets if these communities rely on the major outlets less for information. So, if nothing else, we feel that there will be positive things happening as committees organize and achieve the power that their numbers give them.

Gary Hill, director of investigations and special reports at KSTP-TV, recognized the balancing act between today's ratings and tomorrow's viewers in which local news programs find themselves. He hopes that the major media conglomerates have the foresight not to alienate the growing minority communities:

Broadcast news is ever more competitive. We now have how many newscasts at 10 o clock? I think there's four. And I think there's three at 9 o clock, in prime time, on three different channels. So the market gets ever more fragmented. And to the extent that this might impact some of the decision making in the newsroom, you're always trying to reach the broadest audience. So in some cases you might not serve the minority communities as well as you could if you're selecting stories that reach out across everyone's interest. Having said that, I think, in the long run [trying to only reach the majority interests] is a self-defeating way of programming. You are not much better off if you don t service the fastest growing segment, which is minority populations. [If we do not,] we are going to be out of the race in the long run.

Radio and Internet

Until the 1980s, one company could legally own no more than seven AM and seven FM stations. In 2001, one company, Clear Channel, owns more than 1,200. Profit at many stations is promoted by stripping staff to the bone; some of these places have barely any employees and no local programming. They are computerized corporate jukeboxes, reverse ATM machines. Their broadcast bay is filled with the canned and the bland, a puree prepared at a place far away. Now we have hundreds of radio stations creating a profit with virtually no on-air personnel and no newsroom, no Associated Press wire, no birth announcements, no obits. And not least, no coverage of the police, the PTA or the Lions Club and no high school football scores.[4]

Possibly the media most affected by deregulation has been radio. A few large companies have bought local radio stations and operate them from afar. In fact, four corporations control the music and news delivered to over half the radio audience.[5] In the Twin Cities, one station controls over 12 percent of the market share, as shown in Table 6. The radio stations remaining with their own newsrooms are usually small. Steve Murphy, managing editor of WCCO Radio in Minneapolis, stated at the fact-finding meeting that his station has seven people on staff. Comparatively, Mr. Murphy stated that the local Minnesota Public Radio news station has a staff of 52.

Gary Gilson of the Minnesota News Council was concerned about the change in radio because he believed that communities of color depended on radio for their news more than other communities. He had a very critical view of the changes he has witnessed in radio:

The great overlooked resource is radio. Now radio news has vanished. WCCO Radio has a news department, but it's a shadow of its former self. KSTP Radio used to have a news department. It doesn't anymore. They get the television people to talk through a microphone from a different part of the building. It appears on the radio. But it's in the form usually of a conversation with a talk show host who's filled with opinions. So it's all distorted by the time it gets to the audience. Before deregulation happened, all radio stations used to have to broadcast news, farm news, religion news, all kinds of news. They don t anymore. It's very expensive, and as soon as they were deregulated and saw that they could get rid of it, they got rid of it because it cut into profits. But radio is important, especially in communities of color. And there's got to be a way to create opportunities for ownership and service. That's the great untapped resource now or ignored resource, radio.

Interestingly, minority ownership of radio stations has increased recently despite the rapid growth of the large corporate radio owners. The National Telecommunications and Information Administration study found that:

All minority groups have increased their radio ownership since 1998. In terms of absolute growth, the number of reported Hispanic American-owned stations increased the most with the addition of 57 stations, followed by an increase of 43 African American-owned stations, 18 Asian American-owned, and three Native American-owned. Excluding the effect of the improved search methodology, however, the number of African American-owned stations increased by 15 percent, Hispanic American-owned stations 19 percent, Asian American-owned stations by 300 percent, and Native American-owned by 25 percent. The large increase in Asian American-owned stations was mostly the result of purchases by one large owner.[6]

However, the report concluded, Consolidation still threatens the survival of most minority owners, who as primarily single-station operators find it difficult to compete against large group owners. [7]

The advent and growth of cable television and the Internet provided some of the impetus for deregulation measures. Cable television now provides hundreds of stations to subscribers who can afford the monthly premiums. The number of people of color who have cable service is not known, so it is difficult to understand thoroughly how cable television has affected them. However, the number of people of color with cable television service may not be as great as some think. Brendan Henehan stated, Half of Minnesotans still don't have cable. I think it's easy to get caught up in America where we assume everyone has 500 channels. There are still a great number of Minnesotans that just have over-the-air service. With the Internet, anyone with a computer and an Internet provider can receive news from around the world at anytime. However, it should not be assumed that the Internet is a viable news option for communities of color at this time. According to the National Telecommunications and Information Administration s 2001 data, Minnesota ranks second in the nation in percentage of population with Internet access, but this second-place ranking equates to only 64 percent of the population.[8] Currently, the Internet may not be option for a significant percentage of people of color who still rely primarily on radio and over-the-air television for news. In 2000, the Commerce Department found that 23.5 percent of African American households had Internet usage, whereas the total number of households nationally that used the Internet was 41.5 percent.[9]