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Breaking the News

It's not the Internet that's killing newspapers. It's the equity-chasing investors and their friends at the FCC who have put outsize profits before a free press.

Senate reconfirmation hearings tend to be predictable affairs, marked by polite give-and-take and senatorial grandstanding, but generally free of surprise plot twists. And so it was supposed to go last September 12, when Federal Communications Commission (fcc) chairman Kevin Martin appeared before the Commerce Committee. In March 2005, following the departure of Michael Powell (Colin's son), President Bush had named the young Republican lawyer to head the extraordinarily powerful five-person panel that oversees the nation's media and telecommunications policies. Martin, a boyish-looking 40-year-old who'd been on the fcc since 2001, planned to carry on much of his predecessor's unfinished business, particularly stiffening penalties for on-air indecency and the sweeping deregulation of media ownership rules. But unlike Powell, who was confrontational and contemptuous of his critics, the bland and soft-spoken Martin seemed unlikely to attract controversy.

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But controversy caught up with him when Senator Barbara Boxer (D-Calif.) strayed from the script at his reconfirmation hearing. Boxer began by asking Martin about an fcc study, commissioned by Powell, on the impact of media ownership on local news. Unsuspecting, Martin said that it had never been completed. Then, as he watched glumly, Boxer brandished a draft of the study, which had, in fact, been written more than two years earlier, only to be buried by the fcc. The report found that locally owned television stations, on average, presented 5 1/2 minutes more local news per broadcast than stations owned by out-of-town conglomerates. The findings squarely contradicted the claims made by Martin, Powell, and big media companies, who have argued that lifting limits on ownership would improve local news coverage.

"Now, this isn't national security, for God's sakes," Boxer continued, unable to resist making Martin squirm. "I mean, this is important information. So I don't understand who deep-sixed this thing." Martin meekly said he had no idea, and promised he'd look into it. Within a week, a former fcc lawyer claimed that "every last piece" of the report had been ordered destroyed before it was leaked, and a second unreleased study came to light, prompting Boxer to refer the matter to the fcc's inspector general.

The discovery of the missing studies wasn't just bad for Martin's image, it was a blow to his pet project—trying to repeal what's known as the cross-ownership ban, a 31-year-old fcc rule that prohibits a single company from owning a newspaper and a TV station in the same regional market. Powell had repealed the rule in 2003 amid public outcry, only to have a federal court reinstate it the following year. Last April, Martin told the members of the Newspaper Association of America that he would renew the effort to end this regulatory relic from "the days of disco and leisure suits." Lifting the ban, he said, "may help to forestall the erosion in local news coverage." But now, the fcc's own internal findings confirmed what its critics had been saying for years—that letting one company dominate a city's news business actually undermines the quality of the local media that most Americans rely on for their news.

The renewed push to consolidate even more of the nation's newsprint and airwaves comes as the media are in profound transition. Although we are bombarded with a seemingly endless supply of media options—from cable television to blogs to satellite radio—more and more of the actual news and information we consume comes from a handful of giant media companies. (See "And Then There Were Eight") Meanwhile, locally owned outlets are being squeezed out of business or absorbed at an ever faster clip. In the past three decades, two-thirds of newspaper owners and one-third of television owners have shut down. Newspapers are particularly feeling the pinch: Fewer than 300 of the nation's 1,500 daily papers are still independently owned, and more than half of all markets are dominated by a single paper. The number of newspaper employees has dropped nearly 20 percent since 1990. Hardly a week goes by without another pundit lamenting the demise of the great American newspaper.

The eulogies are also coming from the newspaper executives and investors whose pursuit of phenomenal profits has turned many dailies into shadows of their former selves. They claim that ending the cross-ownership ban will throw a lifeline to foundering papers by allowing them to merge with TV stations and compete with the Internet. In reality, such a move would only fuel the "cut-and-gut" strategies that generate short-term value at the expense of the kind of journalism that exposed Watergate, nsa eavesdropping, and countless corrupt politicians. To see how disastrous this could be for the future of news, just take a look at the cities where the fcc has already allowed cross-ownership to get a toehold.

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