Rather it determined that law restricted speech that the Court could explain was protected by the First Amendment-and that concluded the reasoning. In other words, application of scrutiny analysis is probably less protective of speech than the Court has been in its great speech-protecting cases and, at the same time, allows an activist court to invalidate laws involving the distribution and promotion of peech opportunities that the court has traditionally approved Second, and possibly more important, these cases represent a subtle and undefended reconceptualization of the First Amendment. The courts are basically offering a new(and unwarranted)vision of the status of media entities. Earlier cases had treated media entities instrumentally in terms of serving a democratic society's need for non-governmentally created or approved information and vision. a vibrant communications order Regulations striking at the heart of the media's function of this function were invalid. Hence, censorship-penalties on particular speech hoices, which now provides the favored interpretation of Miami HeraldP-and rules that undermine the institutional integrity of the press interfere with this instrumental role. These should be See C. Edwin Baker, Harm, Liberty and Free Speech, 70 SCalif. L Rev. 979(1997) s9 Although the Court initially offered two, apparently different justifications for its decision in Miami Herald v. Tornillo, 418 U.S. 241(1974), the Court has since limited the rationale of Miami Herald to the concern with content-based censorship. See, e.g., Turner, 512 U.S. 622 at 644, 653-54 60 This problem was the basis of the asserted right not to disclose confidential sources that four,and depending on how Justice Powell is counted, maybe five Justices accepted in Branzburg v. Hayes, 408 U.S.665(1972) Baker-11/06/02
Baker - 11/06/02 - 24 - Rather it determined that law restricted speech that the Court could explain was protected by the First Amendment – and that concluded the reasoning.58 In other words, application of scrutiny analysis is probably less protective of speech than the Court has been in its great speech-protecting cases and, at the same time, allows an activist court to invalidate laws involving the distribution and promotion of speech opportunities that the Court has traditionally approved. Second, and possibly more important, these cases represent a subtle and undefended reconceptualization of the First Amendment. The courts are basically offering a new (and unwarranted) vision of the status of media entities. Earlier cases had treated media entities instrumentally in terms of serving a democratic society’s need for non-governmentally created or approved information and vision. a vibrant communications order. Regulations striking at the heart of the media’s function of this function were invalid. Hence, censorship – penalties on particular speech choices, which now provides the favored interpretation of Miami Herald59 – and rules that undermine the institutional integrity of the press60 interfere with this instrumental role. These should be 58 See C. Edwin Baker, Harm, Liberty and Free Speech, 70 S.Calif.L.Rev. 979 (1997). 59 Although the Court initially offered two, apparently different justifications for its decision in Miami Herald v. Tornillo, 418 U.S. 241 (1974), the Court has since limited the rationale of Miami Herald to the concern with content-based censorship. See, e.g., Turner I, 512 U.S. 622 at 644, 653-54. 60 This problem was the basis of the asserted right not to disclose confidential sources that four, and depending on how Justice Powell is counted, maybe five Justices accepted in Branzburg v. Hayes, 408 U.S. 665 (1972)
unconstitutional on that basis. When protected, media entities were protected in order to serve the interests of the audience in the receipt of uncensored and diverse content However, unlike individuals for whom the notion of structural regulation is somewhat incoherent and whose autonomy the Court often protected, the Court never treated structural regulation of the press, absent reason to see the law as undermining the press'contributions to the audience, as creating any particular constitutional problem Now, however, possibly egged on by Turner;, these lower court decisions are treating media enterprises as rights bearers in their own behalf. On the older view, a court would not ask whether limiting the number of media outlets one firm could own or requiring cable systems to offer channel capacity to outsider programmers burden substantially more speech than necessary. The court would not treat these rules as burdening speech. Rather, the rules distribute speech opportunities The question is whether they do so in a manner that plausibly promotes, or at least could not be thought to undermine, the functioning of the communications order. a yes answer was generally easy. That is, the Court never conceived the corporate media as themselves subjects whose moral 61 This is the respect in which the Court's statement in Red Lion -"it is the right of the viewers and listeners.. that is paramount,-has general applicability. That also is why the court immediately supported this claim with a proposition drawn from print media cases. Red Lion v. FCC, 395 U.S. 367, 390(1969) Baker-11/06/02
Baker - 11/06/02 - 25 - unconstitutional on that basis. When protected, media entities were protected in order to serve the interests of the audience in the receipt of uncensored and diverse content.61 However, unlike individuals for whom the notion of structural regulation is somewhat incoherent and whose autonomy the Court often protected, the Court never treated structural regulation of the press, absent reason to see the law as undermining the press’ contributions to the audience, as creating any particular constitutional problem. Now, however, possibly egged on by Turner, these lower court decisions are treating media enterprises as rights bearers in their own behalf. On the older view, a court would not ask whether limiting the number of media outlets one firm could own or requiring cable systems to offer channel capacity to outsider programmers “burden substantially more speech than necessary.” The court would not treat these rules as burdening speech. Rather, the rules distribute speech opportunities. The question is whether they do so in a manner that plausibly promotes, or at least could not be thought to undermine, the functioning of the communications order. A “yes” answer was generally easy. That is, the Court never conceived the corporate media as themselves subjects whose moral 61 This is the respect in which the Court’s statement in Red Lion – “it is the right of the viewers and listeners … that is paramount” – has general applicability. That also is why the court immediately supported this claim with a proposition drawn from print media cases. Red Lion v. FCC, 395 U.S. 367, 390 (1969)
autonomy must be respected. 2 The Court accepted as a matter of course any structural regulation that could be reasonably seen to serve a better, more robust democracy. It saw absolutely no serious First Amendment interest that was in opposition to structural regulation designed to assure a better-a more diverse, more participatory, a less concentrated-media order. But in the(brave) new world now being offered, the corporate media are the central rights-bearing subjects. Interference with these huge, often monopolistic, institutions is now seen as a first amendment offense. Justice Blacks monition in Associated Press has been forgotten. I. CONCENTRATION POLICE The primary concerns here are to survey existing media specific concentration policy, see how concentration policy has evolved over time, and examine the intellectual underpinnings of the changes However, media specific ownership policy operates within a overlay of general laws, specifically 62 This lack of moral autonomy explains why must-carry rules as well as other structural regulations do ot run afoul of basic First Amendment protections of the individual such as were involved in the flag alute case. West Virginia St. Bd of Educ. v. Barnette, 319 U.S. 624(1943). See also Wooley v Maynard, 430 U.S. 705(1977)(cannot be forced to display on license plate a motto to which the driver objects) See tan 25 Baker-11/06/02
Baker - 11/06/02 - 26 - autonomy must be respected.62 The Court accepted as a matter of course any structural regulation that could be reasonably seen to serve a better, more robust democracy. It saw absolutely no serious First Amendment interest that was in opposition to structural regulation designed to assure a better – a more diverse, more participatory, a less concentrated – media order. But in the (brave) new world now being offered, the corporate media are the central rights-bearing subjects. Interference with these huge, often monopolistic, institutions is now seen as a first amendment offense. Justice Black’s admonition in Associated Press has been forgotten.63 II. CONCENTRATION POLICY The primary concerns here are to survey existing media specific concentration policy, see how concentration policy has evolved over time, and examine the intellectual underpinnings of the changes. However, media specific ownership policy operates within a overlay of general laws, specifically 62 This lack of moral autonomy explains why must-carry rules as well as other structural regulations do not run afoul of basic First Amendment protections of the individual such as were involved in the flag salute case. West Virginia St. Bd of Educ. v. Barnette, 319 U.S. 624 (1943). See also Wooley v. Maynard, 430 U.S. 705 (1977) (cannot be forced to display on license plate a motto to which the driver objects). 63 See TAN 25
antitrust laws. For example, FCC rules long rigidly restricted concentrated ownership of broadcast properties, making antitrust concerns largely irrelevant. Recent deregulatory moves, however, resulted in recently proposed mergers of local radio stations being accepted by the FCC but opposed by the antitrust division of the justice department as anti-competitive. A central policy issue is whether essentially exclusive reliance should be placed on antitrust law. Therefor, this part will begin with a brief review of antitrust issues related to media ownership and then conclude with an assessment whether antitrust law even potentially offers an adequate approach to the ownership issue For an overview, see H. Peter Nesvold, Note: Communication Breakdown: Developing an Antitrust Model for Multimedia Mergers and acquisitions, 6 Fordham Intell. Prop., Media enter. L J 781 (1996) 6S Elisabeth A. Rathbun, Justice Tells ARS to Sell Stations, 126 Broadcasting and Cable #45, p.10(Oct 28, 1996). Ira Teinowitz and Michael Wilke, Justice Depart. Sets 40% as Guide on Radio Mergers Solutions Tied to Target Audience Paves Way for Westinghouse Deal for Infinity, Advertising Age 65 Nov. 18, 1996). In agreeing to the Westinghouse purchase of Infinity Broadcasting, Justice required the sale of stations that would have allowed Westinghouse's share of the radio advertising market Philadelphia to rise from 28%to 45% and in Boston from 15% to 40%, indicating that sometimes a 40% share is too much. Id Baker-11/06/02
Baker - 11/06/02 - 27 - antitrust laws.64 For example, FCC rules long rigidly restricted concentrated ownership of broadcast properties, making antitrust concerns largely irrelevant. Recent deregulatory moves, however, resulted in recently proposed mergers of local radio stations being accepted by the FCC but opposed by the antitrust division of the justice department as anti-competitive.65 A central policy issue is whether essentially exclusive reliance should be placed on antitrust law. Therefor, this part will begin with a brief review of antitrust issues related to media ownership and then conclude with an assessment whether antitrust law even potentially offers an adequate approach to the ownership issue. 64 For an overview, see H. Peter Nesvold, Note: Communication Breakdown: Developing an Antitrust Model for Multimedia Mergers and Acquisitions, 6 Fordham Intell. Prop., Media & Enter. L. J. 781 (1996). 65 Elisabeth A. Rathbun, Justice Tells ARS to Sell Stations, 126 Broadcasting and Cable #45, p. 10 (Oct. 28, 1996). Ira Teinowitz and Michael Wilke, Justice Depart. Sets 40% as Guide on Radio Mergers; Solutions Tied to Target Audience Paves Way for Westinghouse Deal for Infinity, Advertising Age 65 (Nov. 18, 1996). In agreeing to the Westinghouse purchase of Infinity Broadcasting, Justice required the sale of stations that would have allowed Westinghouse’s share of the radio advertising market in Philadelphia to rise from 28% to 45% and in Boston from 15% to 40%, indicating that sometimes a 40% share is too much. Id
Antitrust law and the media The presently dominant approach to mergers-most overtly the concern of section 7 of the Clayton act6 -seems to be a Chicago school interpretation that focuses almost exclusively on economic, primarily efficiency, concerns. As explained by the justice departments merger guidelines antitrust laws merger restrictions have as a dominant, arguably exclusive, aim that mergers should not be permitted to create or enhance market power or to facilitate its exercise " in order to prevent"a transfer of wealth from buyers to sellers or a misallocation of resources. b7 The merger guidelines are logically defined and calibrated to identify a merger in any market in which the merger would cause an increase in the merged firms power over prices. Their application, however, is hardly mechanical For example, despite an economic logic to the task, neither the crucial issues of defining the product or the geographical markets are exact sciences. In the media context, the FCC has reportedly maintained for the last twenty years that all information and entertainment media are part of the same roduct market, implicitly treating them as substitutable. The main rival view is that each media form Section 7 prohibits mergers"where in any line of commerce. in any section of the country, the effect of such acquisition may be to substantially lessen competition or tend to create a monopoly. "Clayton Act 15 U.SC. 18(1988). Also relevant are the Sherman Act, which refers to unfair method of competition, "15 U.S.C.$ 1(1988), and Section 5 of the FTC Act, which applies to unfair method of competition, 15 U.S. C$45(1988) 67US Dept of Justice and the Federal Trade Commission, Horizontal Merger Guidelines(1992, revised 1997)0.1<http://www.usdojgov/atr/public/guidelines/horizbook/10.htmi> Baker-11/06/02
Baker - 11/06/02 - 28 - A. Antitrust law and the Media. The presently dominant approach to mergers – most overtly the concern of section 7 of the Clayton act66 – seems to be a Chicago school interpretation that focuses almost exclusively on economic, primarily efficiency, concerns. As explained by the justice department’s merger guidelines, antitrust law’s merger restrictions have as a dominant, arguably exclusive, aim “that mergers should not be permitted to create or enhance market power or to facilitate its exercise” in order to prevent “a transfer of wealth from buyers to sellers or a misallocation of resources.”67 The merger guidelines are logically defined and calibrated to identify a merger in any market in which the merger would cause an increase in the merged firm’s power over prices. Their application, however, is hardly mechanical. For example, despite an economic logic to the task, neither the crucial issues of defining the product or the geographical markets are exact sciences. In the media context, the FCC has reportedly maintained for the last twenty years that all information and entertainment media are part of the same product market, implicitly treating them as substitutable.68 The main rival view is that each media form 66 Section 7 prohibits mergers “where in any line of commerce ... in any section of the country, the effect of such acquisition may be to substantially lessen competition or tend to create a monopoly.”Clayton Act 15 U.S.C. § 18 (1988). Also relevant are the Sherman Act, which refers to an “unfair method of competition,” 15 U.S.C.§ 1 (1988), and Section 5 of the FTC Act, which applies to an “unfair method of competition,” 15 U.S.C. § 45 (1988). 67 U.S. Dept. of Justice and the Federal Trade Commission, Horizontal Merger Guidelines (1992, revised 1997) 0.1 <http://www.usdoj.gov/atr/public/guidelines/horiz_book/10.html>