Hawaii's Media Monopoly And The Struggle For Democracy

MCH President, Chris Coneybeare wrote the following commentary, originally published at The Hawaii Independent on December 9th, 2011. On Friday, November 25, the Media Bureau of the Federal Communication Commission (FCC) helped further enrich Raycom Media of Alabama by taking the position that Raycom did not violate any FCC rules in its takeover of three TV stations in Hawai‘i.

Media Council Hawai‘i (MCH) filed a complaint more than two years ago, stating that Raycom’s takeover of the 3 stations (KGMB, KHNL, and KFVE) was an unauthorized transfer of ownership and control of these stations. Our complaint attested that this was a violation of FCC licensing rules. It also violates the FCC’s “Duopoly Rule,” which prohibits ownership of two stations in the top four in a single community. Raycom violates the Duopoly Rule by owning both the CBS (KGMB) and the NBC (KHNL) affiliates.

The FCC’s decision arrived in Hawai‘i the day after Thanksgiving, sometimes referred to as Black Friday, a day of profits for retailers. If allowed to stand, this decision will mean huge profits for out-of-state companies. Raycom’s media monopoly will continue to limit the public’s access to independent news sources. This decision also hurts other communities who are facing similar broadcasting monopolies.

Democracy depends on an informed public. To make informed decisions, we need information about our community, the nation, and the world. We need to hear a variety of opinions and from a variety of sources to gain a comprehensive understanding of the issues. Most people get their news through the electromagnetic spectrum (the airwaves). The law says that this spectrum is owned by the public.

The Communications Act of 1934 established the FCC as both regulator and watchdog. Broadcasters do not own the airwaves, and they pay only nominal fees for licenses to use of the spectrum. In return for this lucrative privilege, they are required to operate in the public interest, convenience, and necessity. The FCC’s rules are supposed to ensure diversity, competition, and localism.

Instead of a watchdog, the FCC appears to have become a lapdog to big private interests. The “Black Friday” decision is a good example. The Media Bureau, after finding that the Raycom cartel did not violate the Duopoly Rule, said: “Nonetheless we agree with the Media Council insofar as it suggests that the net effect of the transactions in this case ... is clearly at odds with the purpose of the ... rule.” In holding contrary to their own policy, they are telling us that short-term corporate interests prevail over long-term public needs.

In their decision, the FCC finds that KFVE is a separate entity, not controlled by Raycom, even though KFVE has only two employees, no production facilities, uses Raycom’s advertising sales staff, and is housed at Raycom’s local offices. The “executive” staff of this so-called independent entity consists of CEO, John Fink. In 2009, it was Raycom’s chief executive, Paul Mac Tear, who made the announcement that Mr. Fink had been selected to head KFVE. It is crystal clear who really calls the shots.

In 2009, we were informed that Raycom and MCG Capital had entered into a Shared Services Agreement (SSA), “that this was not a sale, but a way of sharing and reducing costs in a bad economic environment. Without this cost saving one station would have to shut down.”

We were told that this would give us the biggest news room in Hawaii, with more news, more local programming. Paul MacTear Raycom’s CEO told us that “at the end of the day no money is changing hands.”

The reality has been very different, with one station KGMB (CBS affiliate) selling all its assets except its license to Raycom for $22 million plus interest payments of an undisclosed amount.

More than 70 employees lost their jobs. We lost one independent newsroom and one editorial voice, talented journalists, and technicians.

All functions were relocated to Raycom’s new, million-dollar facility.

Raycom entered into a swap of call letters, so that Raycom not only acquired the CBS franchise, but also the KGMB brand, one of the most trusted names in Hawai‘i news.

The promised “biggest news room” actually has fewer full-time news photographers than the old KGMB news room. News is simulcast on the NBC and CBS affiliates, and an identical newscast is delivered to KFVE. So called “new” programming is only old programming re-purposed.

We don’t see any extra coverage. In fact, because of the reduction in journalists, technical support, and camera personnel, news coverage is shallow and stretched. Hawai‘i News Now is simulcast on KGMB and KHNL, and run at different times, same content, on KFVE.

An independent study by the University of Delaware (filed with the FCC’s Quadrennial Review Docket) states:

  • The SSA has led to reduction of the quality of local news. For example, the number of stories devoted to public issues dropped significantly post-SSA for stations involved in the agreement, and the median length of stories covering public issues fell.
  • The stories in which a news crew actually goes to the scene of the story to both shoot video and investigate to create a package presentation has been cut in half by the SSA stations, in favor an anchor voice over video from the scene.
  • Because of the trend, stories are shorter and less extensive. The “hypothetical” benefit that the SSA would provide more enterprising news content has not materialized.
  • The simulcast of news is itself a problem, in that one editorial voice and one independent news room has been lost.
  • The study also tends to support the idea that the SSA has had negative impacts on other broadcast television news, as other stations copied many aspects of the Hawai‘i News Now approach.

There is also an FCC study that shows that non-local broadcast ownership produces far less local news than locally owned stations.

None of this should be taken as individual criticism of local journalists. Many of those remaining continue to perform with distinction. There is a proven link, however, between forms of ownership and the production of quality news and information that are required by a democracy. Look at the Murdoch monopoly model as it was recently revealed in the News Corp, phone-hacking scandal.

Our community has been deprived of diversity, competition, and quality. One company dominates about 50 percent of the television advertising market. This same company controls our CBS and NBC affiliates, and uses the same “news” on all three stations.

Media Council Hawai’i and our allies will continue the fight for broadcasting in the public interest and we will appeal the Media Bureau’s decision to the full FCC. We also intend to pursue all avenues to challenge monopoly control of the public airwaves and the right of Raycom or similar corporations to hold broadcast licenses that negatively impact this and other communities (Raycom is now simulcasting the news in Tuscon, Arizona, as well).

In addition, we are exploring a variation on the Occupy Wall Street movement. Our community may be able to form an egalitarian company that would raise funds to acquire one of the Raycom Cartel’s commercial TV licenses, when divestiture is ordered.

Stay tuned!