News Headlines from the April 11 mediageek radioshow

These are the news headlines that were supposed to be read on last Friday’s mediageek radio show, but some technical difficulties resulted in me not having them to read, and the show not getting recorded. But you can still read them.

Stories include: Murdoch to buy DirecTV; The FCC, Indecency & Ownership; Clear Channel Drops Indy Promoters/Payola

Mediageek News 4-11-03
Mediageek headline news features stories about our communications environment that typically get relegated to the business pages of our newspapers and often don’t get reported at all in the electronic media. News on media law, regulation and industry is not just of interest to investors and stockholders – it’s important to all of us, especially if we want to have a role in changing our media environment to meet the needs of a truly democratic society.

Murdoch to buy DirecTV

This week media baron Rupert MurdochÂ’s News Corporation made a deal to buy direct satellite television provider Direct TV. MurdochÂ’s News Corp owns Fox news, the Fox television network, several other cable channels and newspapers in the US. Overseas News Corp owns direct satellite television providers in the UK, Europe and East Asia, along with cable channels and newspapers.

News Corp first tried to buy Direct TV several years ago, but was outbid by Echostar Communications, which owns the other major direct satellite TV provider in the US, the Dish Network. Late last year anti-trust regulators stopped the Echostar – Direct TV deal from going through, leaving several buyers competing for Direct TV.

Just six years ago News Corp encountered major difficulties getting its new Fox News channel onto cable systems across the country, sometimes paying millions of dollars in placement fees to the nationÂ’s largest operators. With the acquisition of Direct TV, some industry watchers says that News Corp and Fox will come into direct competition with cable TV, with the opportunity to drive down rates and add new services.

But competitors and public interest advocates fear that the deal gives Murdoch a powerful hold on both content and distribution, enticing him to jack up prices of his “prize holdings” to cable providers or threaten to pull them off cable altogether. Murdoch is also known for using his media outlets for political advantage, especially in his relationship with conservative lawmakers like the 1980s Thatcher administration in the UK and the current Bush administration in the US.

The FCC, Indecency & Ownership

In a letter to the FCC, dated April 9, the US Small Business Administration’s Office of Advocacy claimed that the upcoming proceeding on media ownership limits violates federal law. The Regulatory Flexibility Act requires agencies to report on the impact of proposed rule changes on America’s small businesses and allow small businesses to comment on the report.

In its letter to the FCC, the SBA wrote, “We believe that by not proposing specific rules, the commission is limiting the ability of small businesses to provide the agency with needed information on the impacts of the rule and possible alternatives that will lessen any impacts,”

Also on April 9, the majority of the Senate Commerce Committee released a letter they sent to FCC Chairman Powell. In the letter they tell Powell that new media ownership rules will have a long-term impact on the diversity of voices in a market and that the FCC should have a public airing before making them final. Five Republicans and Ten Democrats signed on to the letter that is intended to push the FCC to make its media ownership rules process more public and transparent.

At issue are decades-old rules that prevent a company from owning television stations that reach more than 35 percent of the national television audience as well as a ban on common ownership of a newspaper and either a television or radio station in a market.

Also under review are rules that limit how many radio and television stations in a market one entity can own. The rules are expected to be eased a bit and are under review by order of Congress as well as a federal appeals court, which found the FCC’s justification for some of the regulations to be faulty.

The Commerce Committee is the Senate Body that oversees the FCC. Chairman John McCain plans to hold another hearing on the FCC’s plans before the June 2 deadline and sent Powell a letter urging him to fulfill his legal obligations to resolve the issues, but said he did not support or oppose a particular position.

Meanwhile, on April 10, FCC Chair Michael Powell told the National Association of Broadcasters Convention that he has little interest in more strict regulation of explicit radio and TV content. Powell also defended the commission’s $27,500 fine handed to Detroit radio station WKRK last week for extremely graphic and sexually violent language the station used on an afternoon radio program.

PowellÂ’s comments were part of a freeform panel discussion that included ABC Newsman Sam Donaldson. When pressed by Donaldson on why the commission does not use the “death penalty—license revocation” in such cases, Powell said, “What is really rude to some people is acceptable adult entertainment to others.” Powell did say that the commission will go after stations and owners who are egregious, repeated, willful, and flaunting in their violation of indecency standards.

Clear Channel Drops Indy Promoters/Payola

Bowing to political pressure, on April 9, the nationÂ’s largest owner of radio stations, Clear Channel Communications, said that it would sever ties to a coterie of music industry middlemen who have paid millions of dollars to the radio giant while seeking to influence airplay of artists and songs.

This move by the nation’s biggest radio conglomerate follows criticism from lawmakers who said Clear Channel’s deals with independent record promoters probably violate payola laws, which prohibit stations from playing songs in exchange for money without disclosing the transaction on the air.

Independent record promoters try to sidestep the anti-payola law by paying radio stations annual fees — often exceeding $200,000 – that they say are not tied to the playing of specific songs.

In return, stations give the promoters advance copies of playlists or other airplay-related information. Promoters then bill record labels for each new song that gets airtime.

Clear Channel said that its radio operation would not renew its 10 or so contracts with various promoters when the deals expire this summer.

The record promotion firms, including Cincinnati-based Tri-State Promotions, collectively have been paying Clear Channel an estimated $10 million a year.

The decision is an abrupt reversal for the company, whose broadcasting empire includes more than 1,200 radio stations. In July, Clear Channel President Mark Mays told The LA Times that the company would accept promotional fees as long as record labels were willing to pay, saying it was a fiduciary obligation to the companyÂ’s shareholders.

But Clear Channel radio division chief John Hogan said Wednesday that the company decided to terminate the deals “to eliminate even the appearance of impropriety” and to smooth over the companyÂ’s relationship to Washington lawmakers, who have become increasingly critical of the way the company does business.

Federal lawmakers chastised the company during a Senate committee hearing in January. And Democratic Senator Russ Feingold of Wisconsin has introduced legislation to restrict the music industry’s promotional practices.

Feingold told the LA Times that, “While I think Clear Channel Communications has taken a step in the right direction, it is still essential that we pass legislation to ensure that a replacement ‘pay for play’ system does not emerge.”






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