Republican-controlled Congress

Under a Republican-controlled Congress, the FCC passed rules relaxing bans on media mergers, but in 2014 the FCC took steps to tighten rules on media ownership, including attempts to close loopholes that permitted joint ownership agreements. In addition, the FCC acknowledged that many of its rules were outdated, not keeping pace with cable innovations, let alone the technological innovations spawned by the Internet. yet during this same year, FCC Commissioner Mike O’Rielly testified in a Congressional hearing that he wanted increased deregulation of the media industry. Regardless of the position the FCC takes on the issue of media consolidation, it is clear that media conglomeration is going to remain a part of the media landscape for some time to come. Thus, at least for now, oligopolies are here to stay, and their economic impact will continue to have a profound impact on mass media, particularly on smaller media outlets.

Point: The economics of corporate media consolidation are attractive to shareholders. And yet with increased consolidation there is decreased diversity and less competition in the marketplace. Ultimately, independent ownership of media outlets that would increase diversity of opinion and better represent the interest of local communities is discouraged through media conglomerations.

Counterpoint: Corporate media consolidation put programming decisions into the hands of a few corporate executives who don’t know local markets well or even care about them, except as revenue-generators. Conglomeration gives these companies a powerful voice to steer viewers to their corporate views on political and social values, reduces viewer choice and diversity, and creates homogeneous viewing options.

3.2.2 Conglomerate Behavior 1. Objective: Describe typical media company management

Most companies, including media conglomerates, have a board of directors who choose executives to achieve their profit goals. In a hierarchical business structure, decisions by the board determine the shape of their subsidiary media companies. At Time Warner, this includes the big decisions—whether to buy or sell AOL, whether to enter a partnership with Getty Images to repurpose the images from Life magazine as, or whether to make the majority of their TV content available online and on mobile devices.
Most boards don’t micromanage, but instead leave day-to-day decision-making to the appointed managers of their subsidiary media products. It’s a performance-based system that regards subsidiary managers as expendable. Those who don’t deliver are replaced.

3.2.3 Divestiture 1. Objective: Summarize the trend in divestiture since 2007

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