Telecommunications:

Preliminary Information on Media Ownership

GAO-08-330R: Published: Dec 14, 2007. Publicly Released: Dec 18, 2007.

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Various laws and regulations constrain the ownership of television and radio stations. Five restrictions on the ownership of television and radio stations follow: (1) National television ownership cap - A single entity can own any number of television stations nationwide as long as the stations collectively reach no more than 39 percent of national television households. (2) Local television ownership limit - A single entity can own two television stations in the same DMA if (1) the "Grade B" contours of the stations do not overlap or (2) at least one of the stations is not ranked among the top four stations in terms of audience share and at least eight independently owned and operating full-power commercial and noncommercial television stations would remain in the DMA. (3) Local radio ownership limit - A single entity can own up to 5 commercial radio stations, not more than 3 of which are in the same service (that is, AM or FM), in a market with 14 or fewer radio stations; up to 6 commercial radio stations, not more than 4 of which are in the same service, in a market with 15 to 29 radio stations; up to 7 commercial radio stations, not more than 4 of which are in the same service, in a market with 30 to 44 radio stations; and up to 8 commercial radio stations, not more than 5 of which are in the same service, in a market with 45 or more radio stations; except that an entity can not own, operate, or control more than 50 percent of the stations in a market. (4) Newspaper-broadcast cross-ownership ban - A single entity cannot have common ownership of a full-service television or radio station and a daily newspaper if the television station's "Grade A" contour or the radio station's principal community service area completely encompass the newspaper's city of publication. (5) Television-radio cross-ownership limit - A single entity can own up to 2 television stations (if permitted under the Local Television Multiple Ownership Cap) and up to 6 radio stations (if permitted under the Local Radio Multiple Ownership Cap) or 1 television station and 7 radio stations in a market with at least 20 independently owned media voices remaining post merger; up to 2 television stations and up to 4 radio stations in a market with at least 10 independently owned media voices remaining post merger; and 1 television station and 1 radio station regardless of the number of independently owned media voices. In the 1996 Act, the Congress required FCC to conduct a biennial review of its media ownership rules to determine "whether any such rules are necessary in the public interest as the result of competition" and to "repeal or modify any regulation it determines to be no longer in the public interest."

The numbers of media outlets and owners of media outlets generally increase with the size of the market, although operating agreements may reduce the effective number of independent outlets. Markets with large populations have more television and radio stations and newspapers than less-populated markets. For example, in New York City, the nation's largest market, we identified 21 television stations and 73 radio stations. In contrast, we found 2 television stations and 16 radio stations in Harrisonburg, Virginia, the smallest market in our review. In more diverse markets, we also observed more radio and television stations and newspapers operating in languages other than English, which contributed to a greater number of outlets. While we focused on media outlets located in specific markets, residents, in some instances, may be able to receive television and radio signals from stations located in adjacent markets. Some companies participate in agreements to share content or agreements that allow one company to produce programming or sell advertising through two outlets, among other agreements. In our review, these agreements were prevalent in a variety of markets but not in the top three markets, suggesting that market size may influence the benefits that companies realize through such agreements. To some degree, these agreements may suggest that the number of independently owned media outlets in a market might not always be a good indicator of how many independently produced local news or other programs are available in a market. Ownership of broadcast outlets by minorities and women appears limited, but comprehensive data are lacking. FCC collects data on the gender, race, and ethnicity of radio and television station owners biennially through its Ownership Report for Commercial Broadcast Stations, or Form 323. However, we found that these data suffer from three weaknesses: (1) exemptions from filing for certain types of broadcast stations, such as noncommercial stations; (2) inadequate data quality procedures; and (3) problems with data storage and retrieval. While reliable government data on the ownership by minorities and women are lacking, available evidence from FCC and nongovernmental reports suggests that ownership of broadcast outlets by these groups is limited. For example, reports by Free Press, a nongovernmental organization, found that women and minorities own about 5 percent and 3 percent of full-power televisions stations, respectively, and about 6 percent and 8 percent of full-power radio stations, respectively.

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