Viacom-CBS Merger: Media Competition and Consolidation in the New Millennium

By Schwartzman, Andrew Jay | Federal Communications Law Journal, May 2000 | Go to article overview

Viacom-CBS Merger: Media Competition and Consolidation in the New Millennium


Schwartzman, Andrew Jay, Federal Communications Law Journal


Media Access Project

I start with six propositions.

First, we have the best system of broadcasting in the world because of--not in spite of--Federal Communications Commission (FCC) rules that have limited the size and reach of broadcasting and cable companies.

Second, as Justice Brandeis taught us, free speech is not just an end unto itself, or simply a freedom from Government meddling; it is also a necessary means of democratic self-governance.(1) In crafting the First Amendment, James Madison sought to ensure political equality, especially in the face of economic inequalities. In the twentieth century, Congress and the FCC have preserved Madison's vision by ensuring that broadcasting helps promote free and open political deliberation.

Third, broadcasters are, quite literally, an integral component of the electoral process. We trust them to decide how to provide equal time at equal rates to all political candidates.(2) We count on them to share their monopoly access to publicly owned spectrum with federal candidates, but we permit them to refuse unreasonable requests.(3)

Fourth, over-the-air broadcasting is and will remain for many years to come the single most important influence on how we vote, especially at the local level. For the time being, the Internet is not a substitute for local newspapers and local broadcast news. For example, the Internet does not help the large number of citizens decide for whom to vote in a city council election.

Fifth, broadcasting, especially television, teaches us about each other. Those of us fortunate enough to ride taxicabs and dine in fine restaurants know much less about the people who drive those cabs and bus the tables than vice versa. "We" need TV to show us about all segments of American society more than "they" do.

Sixth, we're needlessly endangering this wonderful but deceptively fragile system.

The policy problem is generic. It really is not about CBS and Viacom. They are businesses playing the angles. The issues posed by a Viacom-CBS merger could have been raised by an NBC-USA Networks merger. In fact, Viacom has in the past worked closely with my organization to promote diversity and open entry in programming markets and to keep huge telephone companies, or at least one huge telephone company, from taking over a huge cable company precisely because it threatened to squelch program diversity and competition.(4) We have supported Mr. Karmazin's vigorous defense of his right to make money by distributing material that is offensive to some but constitutionally protected for all.(5)

But the fact remains that Congress and the FCC have permitted a massive expansion of broadcasters' national and local audience reach first in radio and now in TV. CBS and Viacom have moved to the front of the line, and their merger, if approved, legitimates all the smaller ones already announced or that will soon follow. FCC approval for the mergers of SBC and Pacific Television was employed as precedent for subsequent mergers of Bell Atlantic and NYNEX, then SBC and Ameritech and then GTE and Bell Atlantic. Similarly, the TCI-AT&T merger has been used to justify proposals to merge AT&T and MediaOne and America Online (AOL) and Time Warner.

The size and complexity of these transactions is overwhelming. I cannot deal with every First Amendment and diversity problem they present in the space available. Thus, I will address one seemingly small aspect of the CBS business--local radio news.

Nationally, in addition to distributing CBS radio and TV news, CBS has made multimillion dollar trade-out deals to bludgeon its way toward becoming a leading news supplier for high end Internet sites.(6) CBS's Country Music Television and the Nashville Network provide some national news as well. Although Viacom's TV stations have disgraced themselves by having little or no locally originated programming, the company provides news on MTV and some syndicated TV shows. …

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