The Market

Media Policies and Media Reform

excerpted from the book

The Problem of the Media

U.S. Communication Politics in the 21st Century

by Robert W. McChesney

Monthly Review Press, 2004, paper

The Market

p179
The cable TV systems industry (e.g. Comcast, Time Warner, and Cox) has undergone perhaps the most striking consolidation over the past fifteen to twenty years. It has gone from a "ma and pa" industry of the 1970s to an enterprise in which six giant firms control over 80 percent of the market. The power of such consolidation is immense: since 1996 (when the Telecommunications Act was passed) cable TV rates have increased at three times the inflation rate. Comcast claims over 30 percent of the market, and by all accounts further consolidation is inevitable, as smaller firms cannot compete with such a Goliath. "Size has always mattered in this business," a Comcast executive noted in 2003. For one thing, large cable systems have negotiating leverage with the stations that need to be carried on their systems; independent cable TV channels cannot survive, because they have no negotiating power, unless a large media company, more often than not a cable TV systems operator, owns them." Comcast had so much leverage over cable TV channels by the fall of 2003 that even the other media giants were forced to make concessions unthinkable in earlier times to remain on Comcast systems. "There are three companies" that will own cable TV channels, "Viacom, AOL Time Warner, and News Corporation," mogul Haim Saban predicted in 2003. "The rest are going to get gobbled up."

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As the dust begins to clear from the mergers of the past decade, the contours of the U.S. media system come into focus. There tend to be three main tiers of media firms. The first tier, composed of Time Warner, Viacom, News Corporation, Sony, General Electric, Bertelsmann, and Disney, are vertically integrated powerhouses-indeed vast conglomerates-with various combinations of film studios, TV networks, cable TV channels, book publishing, newspapers, radio stations, music companies, TV channels, and the like. Their annual revenues tend to run in the $15-$40 billion range, placing them squarely among the few hundred largest firms in the world. Cable giant Comcast certainly is large enough to be a first-tier firm, though it is not especially vertically integrated. Expect that to change, if Comcast has its way.

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... twenty of the twenty-five largest cable TV channels are now owned by the five first-tier media firms, the same firms that own the networks and many of the TV stations in the largest markets .40 These five companies, between their cable and broadcast properties, still reach around 90 percent of the total television audience .

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The second tier is composed of another twenty firms-such as Cox, New York Times, Gannett, Clear Channel-that tend to be major players in a single area or two related areas. These firms have annual media sales in the $3-$lo billion range and rank among the six or seven hundred largest firms in the United States. The lion's share of the U.S. media system is dominated by the firms in the first two tiers: they provide or control the vast majority of TV and cable programs, stations, networks, motion pictures, recorded music, magazines, books, newspapers, radio stations, and so on. The third tier is made up of the thousands of much smaller media firms that fill the nooks and crannies of the media system, though they can sometimes have influence in certain markets. They tend to be dependent in some ways on first- and second-tier firms and are often the targets of mergers and acquisitions. Many survive because their markets-and profits-are too small to interest the giants.

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Having concentrated control in media is precisely a problem because such ownership power is extremely important and attractive to owners. Control over public information, over the news, over the culture offers tremendous benefits for media owners, and it is a privilege owners have historically enjoyed, sometimes to democracy's detriment.

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A market-driven media system in a society with pronounced inequality will have structural pressures to reinforce rather than to challenge such inequality; those on top will tend to drive the media to benefit those on top.

p200
People are exposed to the media fare that the giants can profit from, they develop a taste for it, they consume it, and then the media giants claim they must make more of it to satisfy demand. What is demanded depends to a very large extent on what is produced rather than the other way around, what John Kenneth Galbraith called the "dependence effect" in The Affluent Society. To paraphrase Say's Law, supply creates demand. In the immortal words of Walton Hale Hamilton, "Business succeeds rather better than the state in imposing restraints upon individuals, because its imperatives are disguised as choices." So Indeed, the massive amounts that media firms spend on marketing their products-the five largest first-tier media firms spent $4.5 billion on TV advertising in 2002, making the media industry one of the largest advertisers overall -- combined with the nevertheless high rate of failure suggest that these firms (and the market in general) are not particularly good at determining what people want.

For examples of supply creating demand, consider the following. In the 1970S foreign-language films accounted for nearly 10 percent of the U.S. theater box office; by 2003 the figure was under 1 percent. Evidence suggests this was not triggered by a drop-off in audience demand but instead to the sharp decline in foreign film distribution once the theater industry switched over to multiplex theaters . To be commercially viable, movies must open on 1,500 screens and be supported by sizable advertising, "a cost that requires the active participation of a wealthy studio parent. " "If you don't hit it within 24 to 72 hours," a Universal executive commented on the importance of a film's opening, "you're out of the game ." While there is the occasional exception, this logic basically priced most foreign film producers out of the U.S. market. Similarly, classical music accounted for nearly one-quarter of U.S. recorded music sales in 1960; that figure plummeted to 3.2 percent by 2001. Whereas once classical music sometimes could be found on several commercial radio stations in a large city, today listeners are fortunate to find it on a single public station. A key part of any explanation: classical music was discontinued or downgraded in the curricula of a significant percentage of U.S. schools in the intervening years.

In both cases, media giants would claim, accurately, that foreign language films and classical music evoke little demand in the United States today. But the lack of exposure-the low supply eliminated the basis for demand. The same thing could be said for several other media, such as documentary film. This is no surprise because there is no incentive over the long term for commercial media to cultivate tastes or develop interests in new material. Having a commitment to generating new cultural genres and ideas may be good for society, it may be something people value, but it is bad business. People can't reasonably express their desire for an alternative in the marketplace if the choice does not exist and they have not had enough exposure to it to evaluate it.

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People may wish to see more documentaries on television, even as they watch The Jerry Springer Show, just as citizens may wish to have large and effective national parks, even if they do not plan to personally visit any of them, or they may wish to have excellent public schools even if they do not have school-age children. Acting only as consumers, citizens cannot address their social concerns effectively. Markets cannot address all sorts of important values people may wish to see upheld in their media. As Ed Baker notes, all of this points to the crucial importance of public participation in media policy making; how else can the people voice their needs?

p203
By the late 1990s the U.S. children's market for commercial media had grown to astronomical proportions. In 1983 about $100 million in TV advertising was aimed at children. By 1997 that figure had climbed to $1 billion, and the total amount of advertising and marketing aimed at children reached $12.7 billion.", The total U.S. market for children's products was valued at $166 billion in 2000, and another study estimated that children influence up to $500 billion per year in purchases. The media markets have responded with a barrage of media aimed at children, from toddlers to young teens. Attracting children to commercial media and commercial messages is a major industry. A 2003 study sponsored by the Kaiser Family Foundation determined that America's youngest children were "immersed" in commercial television, and to an extent that was "astounding" even to longtime researchers in the field.

The social implications of this carpet-bombing of children by commercial media have been the subject of considerable research. The range of debate extends from "this is probably not a good thing we are doing to children" to "this is a massive crisis for our society.'

*****
Media Policies and Media Reform

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It may appear that the profit-driven nature of the U.S. media system generates an inexorable logic that requires businesses to act as they do, for better or for worse. There is an element of truth to such a position, but taken in isolation it is also misleading. The larger truth is that the current media market's nature is set by explicit government policies, regulations, and subsidies. For the cable TV industry or the commercial broadcasting industry, this linkage between policies and market structure and logic are transparent. The government creates these markets and sets the terms for the firms to operate; only after policies are set does market logic become inexorable. But this same relationship defines all media industries: behind every media system is a government policy or set of policies, and behind every policy is a policy-making process.

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Neil Postman argued that the( replacement of print culture with a culture dominated by television has led to a general dumbing down of society because television produces lazy minds (and shallow institutions) less capable of rigorous and sustained thought compared to those weaned in a society immersed in reading.

p213
Digital technology radically departs from traditional analog broadcasting and opens the door to innumerable new policy options for television broadcasting. For example, on the same amount of spectrum that provided five analog stations to a community, digital broadcasting could offer considerably more channels, well over twenty. Alternatively, society might elect to utilize the spectrum to provide higher-quality transmissions, using more spectrum per station, what is called high-definition television. (Or a combination of the two approaches could be chosen.) The emergence of digital broadcasting technology in the 1990s offered an ideal opportunity to discuss the future of television, electronic media, and fundamental communication policies. Policies could have been crafted and implemented to establish numerous new digital TV stations in every community to complement the existing broadcasters. It would not have been inconceivable, for example, to establish enough over-the-air channels that many citizens would no longer need to subscribe to a cable or satellite service to receive the channels they desire. The possibilities opened up by the technology were enormous.

The corrupt drafting of the 1996 Telecommunications Act, however, denied citizens their right to choose what television would become. The last thing the existing commercial broadcasters wanted was for the public to get the crazy idea that they could reconstruct the TV system to make it superior. So the NAB lobbied successfully to get a clause added to the Telecommunications Act that required the FCC to allocate to each existing broadcaster double their amount of spectrum so that they could simultaneously transmit their signals digitally. This massive amount of scarce spectrum would be given at no charge; other commercial users of the spectrum, like cellular telephone companies, would still have to pay the government. That commercial broadcasters were gobbling up the spectrum and therefore hijacking any possibility for public debate over digital television barely raised an eyebrow in Washington.

What did raise eyebrows was that broadcasters were getting an enormous commercial gift-then valued at $70 billion. It struck many observers as an extreme case of corporate welfare. Senator John McCain called the digital TV giveaway "one of the great rip-offs in American history. They used to rob trains in the Old West, now we rob spectrum. And the NAB antagonized a powerful (though not quite powerful enough) lobby by taking this spectrum from the wireless companies hankering to develop it. For a few years after the law's passage some politicians and regulators occasionally bellyached about how criminal the spectrum giveaway was and made some threats, but, in the end, the NAB got exactly what it wanted. As Business Week concluded, commercial broadcasting is an industry "accustomed to getting its way in Washington."

Beyond the sheer corruption of the digital TV spectrum giveaway, what should be clear is that the rhetoric about "letting the market ...determine the course" for digital television was just that-rhetoric.

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... by 2001, one Wall Street analyst estimated the [digital] spectrum that had been given to the commercial broadcasters as having grown in value to $365 billion.

p215
The FCC will merely set terms so that these industries in combination can generate as much profit as possible from public property. This is regulation in the private interest taken to extremes. Once the digital TV system is in place, years from now, policy makers and industry CEOs alike will almost certainly characterize it as a natural development of free market competition. And any future effort to exact public service from the huge firms granted all these privileges will be dismissed as a callous attempt by the government to interfere with the free market.

If anything, the shift from analog to digital in radio has been even more corrupt than the backroom wheeling and dealing with digital TV. The process was as privatized and as secretive as any imaginable. IBiquity, a private firm whose major shareholders include the fifteen largest radio broadcasters such as Clear Channel, Viacom, and Cox Communications, put the plan together and the FCC approved it in 2002. Under it, the transition from analog to digital radio broadcasting occurs gradually and without change in the radio dial. Because the dial will remain the same, listeners will come to think of digital radio as merely a technical enhancement of the signal, not as a new technology that could have reformed the industry. An opportunity to easily add numerous stations in every community has been squandered because existing radio owners want no new competition for "their" listeners. In addition, because the digital plan calls for broadcasters to transmit identical analog and digital signals simultaneously adjacent to each other, it leaves less room for low-power stations. Arguably .001 percent of the American people, aside from those in the radio industry, have any knowledge of the digital radio plan-there was virtually no press coverage, and even members of Congress are ignorant of it. Yet the plan may well lock radio into an unnecessary system for generations.

p219
... the open nature of the Internet heretofore has not been natural to the technology but, rather, has been premised on the long-standing "common carrier" telecommunication policy requiring telephone companies to permit all who wish to use their services, including Internet access services, the right do so on a favorable, nondiscriminatory, basis. This has been the main barrier preventing firms from erecting lucrative commercial toll booths for websites and users. Cable successfully won a Bush FCC policy in 2002 that eliminated the rights of Internet Service Providers to have any access to their broadband networks. Soon after, the FCC also awarded telephone companies similar control on their all-fiber networks. "At the behest of powerful interests, the FCC is buying onto a warped vision that open networks should be replaced by closed networks and that the FCC should excuse broadband providers from longstanding non-discrimination requirements," FCC Commissioner Michael Copps cautioned in December 2003. "If we continue down this path, the basic end-to-end openness that made the Internet great will be gone. With cable the leading residential broadband provider, and given its new architectural control as a result of lobbying, the Net will take on more of the characteristics of the U.S. entertainment media marketplace. But it is still up for grabs. The outcome of this policy battle will go a long way toward determining how open access to the Internet will remain in coming years.

p225
Ownership does matter, especially media, where control over ideas, news, and culture rates as a unique power even among powerful corporations. Private ownership of media, in nonegalitarian societies, is not content-neutral or viewpoint-neutral; the best ideas do not automatically rise to the top. Add advertising's role, as well as the workings of the oligopolistic marketplace, and private ownership becomes a vise that directly and indirectly pressures content.

p226
The eventual [media] model that won out in the United States, the corporate form, did so not as a result of broad public debate with an evaluation of alternatives, but, rather, because the powerful commercial interests were able to have their way with policy makers. This is a subject much larger than media. As U.S. history shows, the power of corporations was a central political issue throughout the late nineteenth and early twentieth centuries; it dominated the thoughts of the Populists and was a pressing concern to many people during the Progressive Era. The granting to corporations of personhood and constitutional protection remains one of the most controversial legal and economic developments in U.S. history.

p227
... the commercial media market is as effective a media commissar as an authoritarian government might hope for-and has the advantage of achieving its ends without resorting to explicit repression.

p230
For decades the big commercial broadcasters pounded on politicians and regulators to relax or eliminate the rules. In 1996 they triumphed when they inserted a section into the Clinton administration-backed Telecommunications Act eliminating the national caps on the number of radio stations a single company could own.

What has happened with U.S. radio broadcasting since 1996 has often been characterized as a case of market forces running wild: in fact, it is a case of corrupt policy making that allowed a handful of large companies to run wild. Almost overnight the radio industry's structure was turned upside down. Well over half the stations were sold until a few massive firms like Clear Channel (owner of more than 1,200 stations) and Viacom came to rule the roost. With the maximum number of stations it was allowed to own in 1995, Clear Channel accounted for 1.3 percent of the radio industry's revenues; by 2001, the "deregulated" Clear Channel had garnered more than 20 percent of the pot. In addition, overall industry revenues shot up more than 55 percent over the same six years, thanks to large companies' greater leverage over advertisers .6 The value of stations skyrocketed as well since they were far more valuable as part of massive empires than they had been as stand-alone operations. And of course the market values of these stations had nothing to do with the actual costs of production, which were quite low.

Radio broadcasting, which due to its low cost of transmission and reception was ideally suited for local control, decentralization, and creative risk-taking, quickly became a nationally directed enterprise run by a few massive firms in service to Wall Street and Madison Avenue. To top it off, the FCC has been lax in enforcing the admittedly weak new regulations. Although the 1996 rules limit a company owning eight radio stations in a market, the FCC has permitted a company to exceed that number in thirty-four different markets .

The implications for radio content have been striking. Local content is hardly a cost-effective method for a national chain-the whole idea is to lower production costs while jacking up advertising revenues-so local radio news has declined, as has much of locally originated programming. Clear Channel and Viacom have gained notoriety for developing a technique that permitted a corporate announcer to give the illusion that they were speaking locally to different stations around the nation simultaneously. By 2000, advertising comprised around 18 minutes per hour on commercial stations, according to Variety, a sharp increase from a decade earlier. And payola, the long outlawed practice of bribing stations to play certain recordings, has returned to radio as a source of over $100 million in revenues. Now, however, the money goes to the owners, not the disc jockeys, and therefore it is considered quasilegal.

Between payola and the conservatism built into large commercial organizations, the range of music getting extensive airplay in the United States has shrunk, and the notion of localism in music content has been nearly eliminated. And people are not happy. Journalists, music lovers, those in the music industry, and the public at large typically express dissatisfaction with what passes for U.S. commercial radio broadcasting today. Rocker Tom Petty devoted the lead track on an album to radio's decline in 2002. "Saying that things were better [before] is kind of tiring when it comes from old people," Petty remarked, "but they were ." In September 2003 Senator John McCain, the chair of the Senate Commerce Committee that oversees broadcast regulation, weighed in on the Senate floor: "I think there is one area of agreement .... There is too much concentration in radio. I know of no credible person who disagrees with that. "

p236
... [a] fairly recent interpretation of antitrust law shows no concern over concentrated and undemocratic power; instead it shows a virtually single-minded concern with "market efficiency." It is thus of quite dubious value. Antitrust law was spawned during the eras of the populist and progressive movements, which held distinctly political concerns about the effects of concentrated wealth as an impediment to equality and the exercise of self-government. In 1888, Senator John Sherman advocated the first great antitrust law, the Sherman Antitrust Act, not to lower prices for shoppers, but because the trusts' political power threatened to tear the nation apart and undermine the government's legitimacy. This political element to antitrust law was reaffirmed in the 1935 Public Utilities Holding Company Act, in which Congress demonstrated anxiety about the political power that could be harnessed by utility-based conglomerates, so it prevented utilities from owning other enterprises."

In the landmark 1945 Associated Press v. U.S. case, the Supreme Court ruled that antitrust regulations could be applied to the media with no violation of their First Amendment rights. Hugo Black's famous opinion-"The assumption that the widest possible dissemination of information from diverse and antagonistic sources is essential to the welfare of the public, that a free press is a condition of a free society"-opened the door for a proactive initiative against media concentration. Leaving little doubt about the court's opinion, Justice Felix Frankfurter wrote in his concurring statement: "Truth and understanding are not wares like peanuts or potatoes. And so, the incidence of restraints upon the promotion of truth ... calls into play considerations very different from comparable restraints in a cooperative enterprise having merely a commercial aspect." Immediately following the Associated Press decision, Morris Ernst, the legendary ACLU First Amendment lawyer, called for the government to break up the big media companies because they violated the spirit and intent of both antitrust law and the First Amendment." There is no reason to believe that the Constitution prohibits media-specific antitrust or competition laws that would require greater restrictions on mergers. And there is good reason to follow justice Black in thinking such a response would serve First Amendment values. In his opinion in the case Turner Broadcasting System v. FCC, Justice Anthony Kennedy concluded, "Assuring the public has access to a multiplicity of information sources is a governmental purpose of the highest order." Indeed, the only barrier to aggressive antitrust policies in the realm of media comes from Congress and the White House, from lack of political will, and from corruption of the policy-making process.

p239
We need our government to generate a coherent policy for media ownership that encompasses the entirety of the media industries. It must result from detailed study and debate, and it must lay down a set of values and specific guidelines that will anticipate and shape future developments. It should be seen as a huge undertaking, similar in magnitude to the government's response to the energy crisis or the threat of terrorism. It should also eliminate the current piecemeal logic of current antitrust thinking, in which each merger is dealt with separately which serves only to weaken any possibility of meaningful antitrust enforcement. Once a single large company is allowed to get bigger, then all its competitors have to be granted the same privilege or a power imbalance will result.

p241
A radical new development in publicly subsidized media came with the invention of public service broadcasting in the early twentieth century. Unlike previous subsidies, this plan called for the use of public money explicitly to generate media content directly, not simply encourage commercial entities to do so. It stemmed from two other media evolutions. First, radio broadcasting presented an unprecedented problem for every nation: how to best utilize the scarce spectrum that could be devoted to this revolutionary communication technology. Second, the emerging commercial media system, even at its very best, had inherent flaws-externalities-that could be damaging to a self-governing or humane society. In combination, these factors prompted the belief that it was not just a right but also a duty of citizens in a democratic society to subsidize and promote a viable nonprofit and noncommercial broadcasting media sector. The result, public service broadcasting, has become a major institution in much of the world, though much less so in the United States. Still, this public service tradition has much to offer democratic media policy making in general.

Public service broadcasting refers to a nonprofit, noncommercial broadcasting service directed at the entire population and providing a full range of programming. At its best, it is accountable to the citizenry, has some distance from the dominant forces holding political power, and does not rely upon the market to determine its programming.

p242
Cable TV systems are required to turn over channels (and subsidies) for "public access" broadcasting if communities demand them when local monopoly cable contracts are negotiated. These public access channels are legally content- and viewpoint-neutral-they have no editorial position, and, ideally, they teem with a vibrant range of political opinion. Public access channels tend to be most attractive to those who feel boxed out of the commercial system. Similarly, community radio broadcasting-nonprofit and noncommercial stations dependent largely upon listener donations-exists in scores of U.S. cities. The model was pioneered by the innovative Pacifica system, which has "listener-sponsored" stations in five cities. C-SPAN has provided an invaluable nonprofit and noncommercial service on cable television, though it is not the result of public policy so much as a PR gesture by the cable industry to fend off regulation in the public interest. In other words, the public pays a high price for C-SPAN-to the extent it succeeds as a PR maneuver to permit cable companies to jack up their rates-and the public has no control over its operations.

By far the largest government expenditure to create nonprofit and noncommercial broadcasting has been for the Voice of America and various clandestine services like Radio Free Europe. But these programs are designed for overseas audiences-for diplomatic or propagandistic purposes, depending upon one's perspective-and are not meant to be consumed by the people who pay for them. Most Americans barely know they exist.

But it is public service broadcasting that has the broadest and richest tradition. In most democratic nations of the world, a significant section of the spectrum is devoted to nonprofit (and usually noncommercial) radio and television. The most notable example in the English-speaking world is the British Broadcasting Corporation (BBC). Maintaining public service broadcasting has been a difficult task in the United States for any number of reasons, but in particular because the dominant commercial interests have little interest in coexisting with a strong nonprofit sector that would peel away "their" audience. Today U.S. public service broadcasting is in crisis. Never lavishly funded or supported, the system struggles to survive in a fairly small niche of the media market. Its most vociferous critics charge that public broadcasting is a dubious institution in principle and now has become a bureaucratically ossified relic of a bygone era made irrelevant by the plethora of new cable channels and Internet websites. These critics argue that the market, combined with new technologies, can do a superior job of serving the public interest and with no public broadcasting subsidy to boot. Because public broadcasting retains an element of political support, especially from the influential upper middle class, its existence is accepted by most of its critics, but only if it remains marginal and poorly subsidized.

To provide some sense of public broadcasting's dilemma, consider this: 111 2003 public broadcasting received a federal subsidy of around $365 million, about what Disney's ESPN receives in subscriber fees from cable TV systems every two months. If the United States subsidized a public broadcasting service at rates comparable to Britain's per capita rate for public broadcasting, for example, it would have an annual subsidy in the $15 billion range. This would make it one of the three or four largest media operations in our country and provide an enormous spur to audiovisual production-conceivably large enough to change the industry's direction. In Europe, a huge and impressive variety of programming that would never pass commercial muster has been produced as a result of these subsidies.

Why has public service broadcasting been a marginal phenomenon in the United States in comparison to elsewhere? The main reason is that proponents in other nations were able to get their systems established before commercial broadcasters had achieved dominance over the airwaves. The defeat of the broadcast reform movement in 1934 quashed the hope for this caliber of public broadcasting in the United States. At the time, commercial broadcasters argued that few would listen to their stations if people had access to advertising-free stations with quality entertainment-which they conceded that people wanted-so it was unfair to allow public broadcasting to exist and thereby undermine commercial broadcasting. The U.S. government did establish extremely well-funded noncommercial broadcasting services in the 1940S and beyond-but they were directed at those outside the United States. Indeed, the deal made with the commercial broadcasting industry was that those services-Voice of America, Armed Forces radio and television, Radio Free Europe would not be accessible in the United States. The explanation was that explicit government propaganda should be restricted to foreigners, but a clear concern for the commercial broadcasters was that the American public not be exposed to well-funded noncommercial fare.

In the 1960s, the commercial broadcasting lobby finally relented, and a national public radio and television service started, but it was not a BBC type of operation, providing a full range of noncommercial programming to the entire population. The plan for what became the Public Broadcasting Service (PBS) and National Public Radio (NPR) did not call for such a system-the commercial dominance of the airwaves was a given-but rather for a broadcasting service that concentrated exclusively upon providing the public service programming that commercial stations were constantly lambasted for avoiding. The commercial broadcasters laid first claim to popular programming, and public broadcasters were left with programming that had less immediate audience appeal.

At its best, as envisioned in the Carnegie Commission reports that helped birth the system, U.S. public broadcasting was seen as producing cutting edge political and creative programming that commercial broadcasting found unprofitable, and serving poor and marginalized audiences of little interest to commercial networks. As Senator Hugh Scott of Pennsylvania said during the congressional debates on the matter in 1967, "I want to see things on public television that I hate things that make me think! "102 In the minds of the original Carnegie Commission, this was to be a well-funded service based on an excise tax on the sale of television sets that would eventually reach 5 percent; this money would be placed in a trust fund over which politicians would have no direct control. When the Public Broadcasting Act of 1967 was passed, this key element of the Carnegie plan was dropped. Had it been fully implemented, public broadcasting would enjoy an annual subsidy in the $3 billion range in 2003 dollars .

The Carnegie vision was doomed from the start because the independent funding mechanism had been sabotaged. When PBS broadcast muckraking programs such as 1970's Banks and the Poor, it sent some politicians into a tizzy. President Nixon vetoed the public broadcasting budget authorization in 1972 to express his displeasure . The Democratic platform that year, arguably the most left-wing one since the New Deal, stated, "We should support long-range financing for public broadcasting, insulated from political pressures. We deplore the Nixon Administration's crude efforts to starve and muzzle public broadcasting, which has become a vital supplement to commercial television. " PBS eventually did get its funding, but with it public broadcasters got a clear message: be careful in the coverage of political and social issues and expect resistance if you proceed outside the political boundaries that exist in commercial broadcast journalism.

This pattern recurs. Conservatives use what little money Congress provides as leverage continually to badger public broadcasters to stay within the same ideological range found on commercial networks. Conservatives are obsessed with public broadcasting because in it the traditional sources of control in commercial media-owners and advertisers-are absent, so a greater possibility exists that the public system will produce critical work. Milton Friedman has called for subjecting public broadcasting to "market discipline. Soon after the Republican takeover of Congress in the 1994 elections, Speaker Newt Gingrich announced his plan to "zero out" public broadcasting due to its alleged liberal bias. He abandoned the plan when Republicans were flooded with public opposition, much of it from well-to-do people who vote and make campaign contributions.

Accordingly, NPR and PBS at a national level tend to provide a bland variant of mainstream and conventional journalism, comparable to what's on the commercial networks, especially on highly sensitive matters such as the economy and the U.S. role in the world. Public broadcasting is so obsessed with conservative criticism, even more than commercial news media journalists are, that it bends over backwards to appease the Right and appear "balanced." When the conservative pundit Bill O'Reilly stormed off Terry Gross's NPR radio interview program in 2003 because he was upset with the tenor of her questions-by all accounts much milder than how O'Reilly routinely badgers his guests-the response by the NPR ombudsman sent a chilling message to all public broadcasters. "Listeners were not well served by this interview," he said. "Unfortunately, the interview only served to confirm the belief, held by some, in NPR's liberal bias. he message is loud and clear: hands off the Right.

p246
Entertainment and cultural fare has had a slightly different experience. U.S. public broadcasters were consigned to do programming for which there was little audience, so members of Congress concluded that an underutilized service (with little popular support) did not need a lavish budget. Public broadcasters rarely dared to schedule prime-time entertainment programs with mass appeal. Such shows would have helped develop the broad audiences and public support that European public broadcasters enjoyed, but U.S. public broadcasters understood that such an approach was political suicide; the muscular commercial broadcasting lobby would have complained to Congress that the government was subsidizing unfair competition, and thus interfering with the free market. Public broadcasters quickly realized they could count on the federal government for only a fraction of their budgets if they were to produce anything at all. They turned almost entirely away from their original commitment to experimental programming and to marginalized and poor audiences, and instead began cultivating an upper middle class sliver with business and high-culture programming. This tactic provided a solid base for periodic "pledge drives" as well as a political constituency that commanded respect in Washington. It also made public broadcasting increasingly attractive to advertisers-or "underwriters," as they were euphemistically termed.

The prospect of government subsidy continues to decline because as public broadcasting grows more and more commercial within the limits allowed to it, its justification for a subsidy decreases. Similarly, management of public stations increasingly adopts the mores and obsession with ratings and target demographics of commercial broadcasting, because the stations must rely on delivering a wealthy audience to stay afloat.- In this context public broadcasters have come to brag about their affluent audience, rather than bemoan their lack of a working-class following . Public broadcasting becomes increasingly dependent upon corporate money, and that requires it to compete with commercial media for those finds, with all that that suggests. By 2003 PBS formally authorized the airing of 30-second advertising spots. As all of this happens, the government sees less and less justification for public subsidy. Between the government and the market, U.S. public broadcasting experiences the worst of both worlds.

p250
We need to conceive of public media as including a variety of institutions-for example, community and low-power radio and television stations, public access channels, and Independent Media Centers, along with a strengthened public broadcasting sector. When NPR sided with the commercial broadcasters in 2000 and worked against the creation of one thousand new noncommercial low-power FM radio stations, it was one of the darkest moments for democracy in recent U.S. media history. Let us hope it is never repeated.

The Problem of the Media

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