Policy

Senators Ask GAO To Study Content Control

5/21/2008 1:32 PM Eastern

Washington—Three Senate Democrats want a federal study to look at whether media giants have achieved excessive control of broadcasting, pay-television and Internet outlets.

The request came in a May 20 letter to the General Accountability Office from Senate Democrats Byron Dorgan of North Dakota, Patrick Leahy of Vermont and Herb Kohl of Wisconsin.

All three lawmakers have been heavily engaged in media ownership and competition issues for many years, Dorgan on the Commerce Committee and Leahy and Kohl on the Judiciary Committee. The GAO is often referred to as the investigative arm of Congress.

"It is important that we understand the current media environment, the reasons for the drastic decrease in independent programming, and the impact government laws and regulations have on the media industry," the lawmakers said in a letter to GAO head Gene Dodaro, who is acting Comptroller General of the United States.

The lawmakers asked the GAO to study five areas, including the identification of the sources of programming distributed by major media outlets; the impact of ownership consolidation on the ability of independent programmers to reach an audience; and whether traditional media companies have come to dominate the most popular Web sites.

The GAO, the lawmakers said, should also report "what changes to existing laws and regulations pertaining to the carriage of programming" that "industry participants and experts" think should be made. Depending on its findings, the GAO could help small cable operators in their ongoing regulatory battles with TV stations and major cable programming suppliers over pricing terms and bundling conditions.

In their letter, the lawmakers suggested that independent programmers have been pushed aside by TV networks and face few opportunities to provide programming to cable and satellite TV audiences.

"While the subscription video industry once looked like a promising alternative for independent programming, vertical integration and retransmission agreements have prevented this from coming to fruition; in particular, the parent companies of the cable operators and broadcast companies control much the subscription video content," the lawmakers said.

In March 2006, the Federal Communications Commission reported in its most recent video competition report that at least one cable operator had a financial interest in 116 of 531 national cable programming networks, putting cable vertical integration at about 22%.

That's down from about 50% in 1993, a year after Congress ordered cable operators to sell many of their channels to direct broadcast satellite companies about to enter the subscription video market.

Vertical integration in cable should decline even more after Time Warner Inc. announced Wednesday that it plans to separate from Time Warner Cable, the second largest cable operator, later in the year. Ownership of such marquee brands as CNN and HBO are expected to remain with Time Warner Inc., not the cable company.

March