The New Media, the Fairness Doctrine, and deregulation

Deregulation: Good for the Innovators at the Expense of the Older, Legacy Companies

Deregulation inevitably results in lower costs, higher quality and more choices for the consumer, when it is properly done, in industry after industry, not just in the media, and its track record is long and successful.

— The airline industry, deregulated in 1978 through the work of Alfred Kahn, has seen accident rates halved and prices dramatically lowered through new entrants like Southwest, Jet Blue, WestJet, and others.

— The telecommunications industry deregulation began on January 1, 1984 as the result of the Judge Harold Greene’s settlement of a government lawsuit against AT&T, and led to the reduction of long distance rates by 80% and the dramatic growth of the RBOC’s, MCI, Sprint, and other choices for consumers.

— The express delivery inustry was potentiated through Senator Thomas Eagleton’s 1979 creation of an “urgent letter” exemption to the USPS’s (Post Office’s) monopoly on mail delivery. Today, FedEx alone, which barely existed in 1979, has sales of over $25 Billion.

Deregulation is not a friend to the former monopolies or oligopolies once protected by government fiat. Once they are subject to the creative destruction of capitalism and competition, they generally suffer long and painful declines. TWA, United, Continental, US Air, PanAm, Eastern all filed bankruptcy, some twice. AT&T, a shadow if its former self, was booted from the Dow Industrials this year, and replaced by one of its former subsidiaries, Baby Bell Verizon Communications. The US Postal Service is a perennial story of cost-bloat and revenue squeeze.

Note that the legacy players in each industry have had decades to get their acts together to compete in the deregulated environment, but in case after case, they fail to do so. The reason for this is primarily cultural: heavily regulated and monopolistic companies become risk-averse, slow moving, complacent, arrogant and insular, and over a long period of time, they attract and promote managements who are comfortable in this atmosphere. When faced with a radically new and competitive environment, they have little way to implement an institutional response to the upstart competition, and they are often dismissive of the upstarts. I have written at length on this topic here.

Deregulation of Conservative Political Speech

The deregulation of conservative political speech occurred in 1987 with the FCC’s repeal of the so-called “fairness doctrine,” which required that controversial viewpoints on one side of an issue be balanced with an opposing perspective. The fairness doctrine’s constitutionality had been tested and upheld by the U.S. Supreme Court in a landmark 1969 case, Red Lion Broadcasting v. FCC (395 U.S. 367), but was fairly consistenly weakened in subsequent rulings prior to 1987.

As a result of deregulation, on August 1, 1988, Rush Limbaugh began the creation of the modern talk radio industry, when he debuted on over 300 radio stations in his syndicated program. Today, Limbaugh estimates that his audience comprises over 20 million listeners a week on over 600 stations. More importantly for the spread of conservative discussion, there are now over a dozen large synidicated conservative programs, as well as many more local ones, spanning the hours of 6am Eastern through 9pm Pacific. I have estimated the audience for conservative political talk radio at over 80 million listeners, though the primitive data collection methods of Arbitron make estimates very difficult.

Whether the number is more or less than 80 million does not matter; in any event the number is very large compared to the previous outlets for conservative thought such as National Review, whose circulation is 150,000. Moreover, talk radio is a participatory environment, with much agreement but also much debate, and this is the key to Limbaugh’s accomplishment. Conservative talk radio is a national, virtual community of certain ideas and values, for people who had often previously felt themselves to be disenfranchised from the national debate as it was framed on the network news programs.

Telecommunication deregulation has sparked all sorts of innovations, which increase the power, intelligence, coverage areas and portability of communications devices. So it has been with the deregulation of conservative talk radio. It is no accident that that talk radio is often discussed as part of a larger network including Fox news and the internet. The center-right blogosphere is an extension of the community created 16 years ago, though of course it is not co-terminous. However, if I said that some “environmentalist wacko” called a politician a “racist, sexist, bigot, homophobe” or if I used the phrase “talent on loan from God,” the blogosphere would know the source. For the purpose of our discussion here, a community began to grow a decade an a half ago who knew just what to expect from spokesmen for the Democratic Party “and their willing accomplices in the media.”

Deregulation of political speech has been a boon to Republicans and conservatives over the last decade, gaining majorities at every level of government, as I have noted elsewhere. By contrast the legacy elite broadsheets have seen their circulations decline in the 10-15% range over that period. As with other industries like airlines and telecommunications, the legacy media are mad about their loss of power and efficacy, but they find it impossible to understand that their competition is simply delivering a product in greater demand than theirs.

The Blogosphere and the Acceleration of the Legacy Media Meltdown

The political influence of the blogosphere emerged in the Trent Lott affair in December 2002, which, even the New York Times noted, was driven by bloggers like Andrew Sullivan as well as the conservative punditocracy. The blogosphere came of age as a political force a year and a half later with John O’Neill’s Unfit for Command and the Swift Boat Veterans for Truth.

In a brilliant marketing campaign that will be a business school case study in years to come, O’Neill created enormous buzz for his book among an audience of millions for practically zero dollars. First, O’Neill got Drudge to send out a “red alert” on August 3, and posted a devastating ad on August 4, as well as making a limited buy for the spot in three markets. O’Neill was on Hannity and Colmes that night, as Jonathon Last notes, and the ad was viewed and discussed at Polipundit, Instapundit, Powerline, Tom McGuire, and other sites. By August 5, the Kerry campaign was adding fuel to the fire with a campaign of legal intimidation, against which distinguished plaintiff’s counsel O’Neill had pre-emptively acted. Importantly too, Rush Limbaugh devoted his entire hour two monologue and caller discussions to the book on August 5. On August 6, the Christmas in Cambodia chapter was made available for download, and within a few days Glenn Reynolds posted the “seared…..seared” portion of the 1986 Congressional Record on his site. The revelations, comparisons with Tour of Duty and past press articles, and speculations increased exponentially thereafter.

On August 19, two weeks into the story, Kerry came out to condemn the SwiftBoatVets, though not to challenge their factual assertions. As Last noted:

[S]uddenly the story was news. The numbers are fairly striking: Before August 19, the New York Times and Washington Post had each mentioned Swift Boat Veterans for Truth just 8 times; the Los Angeles Times 7 times; the Boston Globe 4 times. The broadcast networks did far less. According to the indefatigable Media Research Center, before Kerry went public, ABC, CBS, and NBC together had done a total of 9 stories on the Swifties. For comparison, as of August 19 these networks had done 75 stories on the accusation that Bush had been AWOL from the National Guard.

After Kerry, the deluge. On August 24, the Washington Post ran three op-eds and an editorial on the Swifties; other papers expanded their coverage as well. But, curiously, they didn’t try to play catch-up with the new media in ascertaining the veracity of the Swifties’ claims. Instead, they pursued (or rather, repeated) the charge Kerry made: that Bush was behind Swift Boat Veterans for Truth. It was a touch surreal–as it would have been if Democratic national chairman Terry McAuliffe’s criticism of Bush’s National Guard record had prompted the media to investigate Terry McAuliffe.

As of this writing, it has been over five weeks since John Kerry gave a press briefing regarding these matters. He has not responded personally and on the record to the charges levelled by the SwiftBoatVets.

Trying to Change the Subject, but Failing

This writer believes that the CBS News 60 Minutes II interview of Ben Barnes and the production of the Killian memos that are negative towards Bush are the essence of the Kerry campaign’s reposnse to the SwiftBoatVets. (We discuss in other posts Ben Barnes’ scandal-plagued past, and Rather’s possible conflict of interest problems in his interview of Barnes.) The idea was to change the subject back to the preferred Bush-AWOL line, or at least provide a parallelism in Bush and Kerry scandals so that Kerry would have the trump card of saying that at least he had been in harm’s way.

The media are as much as 12 to 1 for Kerry and Evan Thomas boasted of the 15 point advantage they could give the candidate. CBS has previously featured Richard Clarke, Bob Woodward, Paul O’Neill and Joe Wilson taking shots at Bush. Dan Rather has a long history of ideological and financial support for Democrats. So, as reported by the Spectator, the DNC or the Kerry campaign gave the Killian memos to Rather to use against Bush. In the old days this might have worked, but not today.

CBS’s Strategic Errors stem from its Blindness as an Elite, Legacy Media Corporation

In adopting the strategy of trying to change the subect, CBS has committed two critical errors that arise from its status as an elite legacy media company. It has utterly failed to grasp the changes that have come about through the technological innovations of its conservative competitors. Here is what CBS fails to see:

(1) the legacy elite media no longer solely control the news agenda
(2) falsehoods are often easily exposed within a single news cycle, so they don’t work as well anymore.

In the old days, the news agenda has been set by the New York Times, and to lesser extent the Washington Post and the networks. NYT stories in the morning would form the template for evening network news reports. Sometimes stories would migrate from TV to the elite broadsheets, like the Bush memos. Conservative talk radio for the most part consisted of commentary on what the papers said this morning or what the TV news said last night. Hence, despite their declining power, insititutions like the New York Times , the Washington Post, or CBS could still set the agenda for a day’s news cycle — with appropriate caveats for breaking news, storms, crises, etc.

The SwiftBoatVets v. Kerry saga shattered this paradigm. Over the course of two weeks, a story that the legacy media absolutely did not want to cover became the #1 political story in the US, until the NYT and WaPo were forced to cover it. The elite legacy media still has not figured out how this happened. (One excellent example of how the migration occured is shown in the Powerline/Star-Tribune controversy.)

Moreover, the legacy media’s trick of falsely reporting a story on page one or in prime time, and then printing a retraction later, has been blown away by the incredibly short cycle time of the blogosphere. (60 Minutes has done it in the past, the AP tried it with the “boos” story, among others, and the Boston Globe tried it without success yesterday.)

The Blogosphere had the story deconstructed by dinner time of the first day

The phony Bush TANG memos are perhaps not the best example for figuring out the cycle time of the blogosphere, because they are such flagrantly inept forgeries, but they are instructive just the same. Within 49 minutes of the posting of the NYT story at 8:10 PDT on 9/8/04 on Free Republic, they were exposed as probable frauds based on the proportional fonts they used. When Powerline began anew in the morning with a 5:51am PDT 9/9/04 post, the blogosphere went wild.

Within a few hours of the initial Powerline post, a dozen new issues had been raised by citizen-editors for new investigations, and had been appended to that initial post. These included: the miniature superscripts, wrong paper size, wrong Air Force procedures, wrong Air Force formatting, incompatability with other 1970’s documents, wrong signatures, costliness and unavailability of potentially suitable IBM machines, the issue of kerning, the retirement date of General Staudt. The story matured fast enough for Stephen Hayes to have produced a Weekly Standard piece on it by 4pm, and for Fred Barnes to use that summary on Special Report.

Initially the blogosphere acted as reporters, investigating and fact checking the allegations as made by CBS. While doing so, the blogosphere noted other inconsistencies and problems with the documents, and put in process their investigation. In other words, while CBS was sleeping, unaware that it had to deal with credibility problems #1, proportional spacing and the raised “th,” Powerline’s editors and reporters had already moved on to phase two stories about kerning, paper size, etc.

Meanwhile, within the same 24 hours of the first Powerline story, phase three investigations were begun. These included Killian’s relatives, how CBS got the phony memos, and pretty serious forensic investigations by people with decades of experience in the desktop publishing industry. Meanwhile, CBS was still in phase one, focusing on miniature superscripts, and hypothetical composing machines from the 1970’s, as well as misleading use of a handwriting expert, and misuse of a Boston Globe interview, among many others (Hugh Hewitt has posted a list of 19 problems, many of which are individually lethal for the memos).

As of this writing, it appears to be only a matter of time before CBS has to make a retraction of its use of the memos, or face continuing and mounting controversy. Indeed, CBS seems alredy to be doing so, but in stages. This is the main link to the documents story on the CBS website, and the story date continues to be 9/6/04, but the story keeps changing and weakening regarding the documents. So CBS may be pioneering something new, after all: the non-retraction retraction, the process of saying you stand behind your story, while backing away from many of its most important details.

Where do we go from here?

First, the little picture: (1) Dan Rather is unlikely to apologize, though there may be some concession ultimately that some document or other was questionable; (2) CBS is already cleverly both standing by “its overall story”, while constantly revising the story within the same url with the 9/6/04 dateline; (3) the Bush-AWOL story is in its 5th telling now and has no legs, since, as Mark Steyn said, no one cares “whether George W. Bush failed to show up for his physical in the War of 1812;” (4) it is unclear whether John Kerry can get away with not answering questions about his Magic Hat and VC the Wonder dog, just because he tells Karen Tumulty, regarding Vietnam, that, “I’ve answered all the questions I’ll answer.”

Regarding the bigger picture, the futures of the elite legacy media companies, past business history may be instructive. AT&T tried to deal with upstart competition by introducing a low-cost long distance service under a different brand name. It failed. The legacy airlines have tried restructuring, with only limited success. They tried to create low-cost airlines within their corporations, like CALite, the United Shuttle, and others. To date, they have failed. The Postal Service tried to set up an operation to rival FedEx. It failed.

It is notable that the airlines’ restructurings, the only limited success story above, began with a frank admission by those companies that they had serious problems. There is no apparent acknowledgement of serious problems at CBS, nor at the other elite legacy media companies. While we can probably expect a few cosmetic changes — a little better fact checking, fewer misleading quotes from sources — to prevent the corrections page from working overtime under the yoke of the blogosphere, substantive changes are unlikely, based on the experiences of companies in other industries. Based on history, we would expect long, ugly declines in the fortunes of the legacy media companies.

A word of caution to CBS is in order, however, because of its particularly egregious dishonesty in the matter of the phony Bush memos. Haydn’s Symphony “La Reine” got its name from Marie Antoinette in 1787, but it was only a few years later that she was in no position to listen to it. Downfalls can sometimes be abrupt and painful.

One Response to “The New Media, the Fairness Doctrine, and deregulation”

  1. John Wallace Says:

    On June 24, 2008, House Speaker Nancy Pelosi (D-CA), while at a Christian Science Monitor breakfast, told reporter John Gizzi, that she favored a return of the Fairness Doctrine. The imposition of the Fairness Doctrine would force radio broadcasters to provide equal time to opposing points of view, which would essentially give the government control over what the people can and cannot hear.

    Ms Pelosi also said she supported the efforts of Rep. Louise Slaughter (D-NY) who has been very active behind the revival of the Fairness Doctrine. Rep Slaughter had introduced the 2004 MEDIA Act to bring back the Fairness Doctrine and reintroduced it in 2005 as the Fairness and Accountability in Broadcasting Act.

    The Democratic leadership knows that they can’t directly pass a “Fairness Doctrine” piece of legislation, so they will most likely try to slip it in under another name or attach it to some ‘must pass’ piece of legislation. Their support of the ‘Fairness Doctrine by any means’ strategy poses a direct threat to American citizens’ constitutonal right of Freedom of Speech.

    The important questions for Americans to ask are: Why is Nancy Pelosi and the Democrats against free speech for the American people? Why are they so determined to bring back the Fairness Doctrine? and why is the Democratic leadership refusing to bring a true piece of Freedom of Speech legislation, The Broadcaster Freedom Act HR-2905, to the floor for a vote?

    I believe that it was the collapse of the radio station “Air America” a Liberal talk station, that has led to this attempt to re-introduce the Fairness Doctrine as a form of de facto censorship. It appears that if certain political views can’t compete in the world of ideas, then the solution is to pass a law that forces radio stations to air those views.

    I am opposed to any resurrection of the “The Fairness Doctrine,” the 1940’s law that effectively censored political talk radio for many years, because it is a violation of the First Amendment and limits Free Speech. The real issue here is not what you “are able to” see or hear, which is what the Fairness Doctrine was about originally. It’s about placing limitations on the Freedoms you currently have to “choose” what to see or hear.

    In the 1940’s and 50’s, Americans had few choices with only three major networks and there was some validity to the Fairness Doctrine. Today, Americans have an almost unlimited choice of where to get their information: regular TV, cable TV, regular radio, satellite radio, internet, web-blogs, etc., which makes the Fairness Doctrine unnecessary.

    I support the Broadcaster Freedom Act (HR-2905), introduced by Representative Mike Pence (R-Ind) which would prevent these first amendment restrictive regulations from returning. Representative Mike Pence introduced the BFA last June, where it is still awaiting a vote. As of June 25, 2008, two hundred Members of Congress have signed a discharge petition which would force the House to make an up or down vote on the legislation, but an additional 18 signatures are still needed. So far, not one single House Democrat has signed the petition to bring the legislation to the floor for a vote.

    It should also be noted that two of the Federal Communications Commission (FCC) Commissioners have already indicated that they favor the return of the Fairness Doctrine. All that would be needed to reinstitute Fairness Doctrine regulations would be for the next President to appoint a third sympathetic commissioner. Then, the regulations could go back into effect without any vote at all and the constitutional Freedom of Speech rights and guarantees of all Americans would suffer another blow.

    By not bringing the Broadcaster Freedom Act to the floor for a vote, Speaker Pelosi is attempting to limit the constitutional rights of Free Speech of those American citizens who happen to oppose her political views.

    The constitutional right of Freedom of Speech guarantees that people or organizations have the right to express their ideas without danger of censorship, interference or punitive action by the government. It does not mean that people or organizations with different views must be provided with a meeting hall, a radio station or a printing press through which to express their ideas. Those who value the First Amendment, as I do, must oppose the Fairness Doctrine, in any form, as a serious threat to their Freedom of Speech.

    John Wallace
    Candidate for Congress
    NY’s 20th COngressional District

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