Well connected

Introduction

The three largest local phone companies control 83 percent of home telephone lines. The top two long distance carriers control 67 percent of that market. The four biggest cellular phone companies have 64 percent of the wireless market. The five largest cable companies pipe programming to 74 percent of the cable subscribers nationwide.

Those findings come from the Center for Public Integrity’s unprecedented examination of the telecommunications industry, the centerpiece of which is a first-of-its-kind, 65,000 record, searchable database containing ownership information on virtually every radio station, television station, cable television system and telephone company in America.

The database reveals that broadcasting and cable behemoths such as Viacom, Clear Channel and Comcast already dominate many of the nation’s media markets, even as the Federal Communications Commission moves to further relax media ownership rules at a meeting scheduled for June 2. To illustrate this trend, the Center analyzed current media ownership in the hometowns of the five FCC commissioners—though any American can get similar information from the database about his or her hometown with a few simple key strokes.

This report, entitled “Well-Connected,” is the first phase of a three-year investigation of the telecommunications industry. The full report and database can be found on the Center’s web site.The report also explores the close relationship between the FCC and the interests it regulates. FCC officials have taken more than 2,500 trips paid for by companies and trade groups from the telecommunications and broadcasting industries, and the agency increasingly relies on industry-generated data to justify sweeping deregulation proposals.

The ownership study uses the hometowns of the five commissioners as examples of how local ownership of the media in the nation has dwindled since 1996 when the FCC most recently loosened its regulations on media ownership.Media concentration

The ownership study in the five cities reveals:

• Of the 203 commercial radio stations in the five home towns, 48 are owned by four publicly traded, out-of-state radio conglomerates. Twenty-seven of those are owned by radio giant Clear Channel Communications.
• The cable systems in the five communities are controlled by four companies. AOL Time Warner owns systems in Charlotte, N.C., and Milwaukee; Birmingham’s system is owned by Advance/Newhouse, which is also programmed by AOL Time Warner; Louisville’s system is owned by Insight Communications Co., the nation’s ninth-largest cable company. Only the Rapid City system is locally owned.
• Of the 20 network affiliates in the five cities, 15 are owned by out-of-state companies, including two each by News Corp. (Fox Entertainment Group) and Hearst-Argyle Television Inc. (a division of Hearst Corp.).

Frequent FCC fliers—on industry’s nickle

The Center examined travel records of FCC employees and entered that information into a searchable database, also accessible through the web site.

The report shows that FCC officials have taken 2,500 trips costing nearly $2.8 million over the past eight years, most of it from the telecommunications and broadcast industries the agency regulates. That was in addition to about $2 million a year in official travel funded by taxpayers. Among the other findings:

• FCC commissioners and agency staffers attended hundreds of conventions, conferences and other events in locations all over the world, including Paris, Hong Kong and Rio de Janeiro staying in such high-priced hotels as the Bellagio in Las Vegas.
• The top destination was Las Vegas, with 330 trips. Second was New Orleans with 173 trips and third was New York with 102 trips. Fourth on the list was London, which FCC officials visited 98 times. Other popular destinations included Orlando, San Francisco, Miami, Anchorage, Palm Springs, Buenos Aires and Beijing.
• The biggest industry sponsor of the trips was the National Association of Broadcasters, which paid $191,472 to bring 206 FCC officials to its events. NAB, which represents radio and television stations nationwide, has lobbied aggressively in recent months to keep the current FCC rules limiting media ownership in place.

Reliance on industry data

A third report came out of the Center’s data gathering efforts, which revealed a disturbing dependence by the FCC on outside information providers.

The report finds that the FCC’s reliance on non-government private data is so ingrained that when public interest groups asked for access to data underlying a series of media ownership reports last fall, the FCC relented only after issuing a quasi-judicial “protective order” meant to keep the information secret.

When the Center was constructing its database of media companies, researchers and reporters were repeatedly referred by FCC staff to private companies for basic information on ownership, audience reach and cable subscribers. Getting market share information, which is key when reviewing whether broadcasters are within existing FCC limits, was all but impossible without going outside the agency.

The study was funded by a grant from the Ford Foundation, with additional support from the Open Society Institute.