TheBuzz
TheBuzz
TV and cable execs
split on court decisionThe consolidation that has largely chased small independent operators out of the radio industry could soon come to television and cable in the wake of rulings by the U.S. Court of Appeals in Washington, D.C.
On Tuesday the court overturned a federal rule limiting the reach of television station owners, sending it back to the Federal Communications Commission for reconsideration; it also rejected an FCC rule prohibiting ownership of a cable system and broadcast station in a single market.
Hawaii broadcasters were divided on the local effects of the rulings.
"I don't know that we've ever considered buying a broadcast TV station in this market," said Oceanic Director of Public Affairs Kit Beuret, "and I don't think there's anybody here with the wherewithal to buy the cable company." He doesn't believe the rulings will have any immediate local impact.
Both broadcast stations and cable systems face the challenge of making their annual budgets, Beuret said. "But it's probably more valuable to own a cable system than a broadcast station."
The ruling on the ownership cap was expected, KHON Vice President and General Manager Bill Spellman said.
"It could be much like radio where there could be a few larger owners like a Clear Channel in radio, that own numerous TV stations," he said. "I think it's going to change the ability of smaller operators to remain in business."
Honolulu's major TV stations are owned by large corporations.
KHON owner Emmis Communications Corp., Hearst-Argyle Television Inc. and Raycom Media Inc. are "pretty good-sized operators," Spellman said, but "all or any one of them could be eaten."
Emmis CEO Jeff Smulyan recently characterized the company as a buyer, not a seller. Emmis also owns KGMB TV under a temporary FCC waiver allowing single ownership despite the stations' larger-than-allowed combined market share. The court rulings have no bearing on the so-called "duopoly" rule, Spellman said, but he thinks the ruling could give the FCC more motivation to relax it.
"Seeing that studios own networks or vice versa and a number of distribution outlets," Spellman said, "(lifting the cap) gives them more control of their own product; it gives them more power to own more distribution systems meaning more TV stations."
That's the worry for those opposed, said Mike Rosenberg, President and General Manager of ABC network affiliate KITV, owned by Hearst-Argyle.
"It's a decision fraught with peril," he said. "The real fear we have is if the cap gets raised, the more control ABC has over the network distribution system and the less control stations not owned by ABC have over their own destiny."
"Right now ABC grudgingly allows us to pre-empt (network programming) for Merrie Monarch. The more the partnership erodes -- the less they're going to let us do things like that. In the end I don't think it's very good for local television," he said.
KHNL/KFVE Vice President and General Manager John Fink said the cap should remain as a bulwark. Owned by Alabama-based Raycom, in January 2000 KHNL and KFVE TV became the nation's first "duopoly" or single ownership of two stations in one market. Lifting the limit, he said, "would make for what some consider to be unacceptable media concentration."
"The biggest argument is how much does a global entity care about the local market?" he said.
Consolidation could lead to a limit on the number of local voices, he said.
Spellman called the issue of voices interesting. "There's been a proliferation of voices in the community," he said, contrasting the few broadcast stations available in the early 1970s against today's wide selection of cable and satellite channels.
"News and information and public access will continue to rise to the surface," he said. "The marketplace will determine the demand for how many local voices there are."
Mergers and consolidation are the business themes of the new millennium, said Jack Bates, chairman and chief executive of advertising and public relations company Starr Seigle Communications Inc.
"Handled well, the benefits achieved though consolidation will mean that the consumer should continue to have several media choices available because of the greater operating efficiency consolidation offers," he said, but expressed concern about control of consumer information.
Erika Engle is a reporter with the Star-Bulletin.
Call 529-4302, fax 529-4750 or write to Erika Engle,
Honolulu Star-Bulletin, 500 Ala Moana Blvd., No. 7-210,
Honolulu, HI 96813. She can also be reached
at: eengle@starbulletin.com