If It's Challenged In Court, Agency Can Cite Formula: Ex-Antitruster Has `Diversity' Rule
by Greg Gatlin
Boston Herald

When the Federal Communications Commission defends its new media ownership rules in court - and experts say that's inevitable - it will likely turn to a complicated formula it calls a ``diversity index.''

The diversity index, unveiled Monday as part of a sweeping change in regulations governing ownership of the nation's newspapers, TV and radio stations, is not actually a rule. Instead, it's a means of defending the new rules.

The index was developed by a commission whose chairman, Michael Powell, a former antitrust lawyer, is said to have a penchant for trying to quantify things some say aren't easily quantifiable - such as how much media diversity a city offers.

The courts have told Powell's FCC that arbitrary rules are unacceptable. Defend them with empirical evidence, or they will be eliminated, courts have said.

Should skeptical judges ask how the FCC came up with its new rule that says markets with nine or more TV stations are open to newspaper-broadcast ownership combinations, while markets with three or fewer are not, the commission will point to its diversity index.

The index measures the availability of outlets and assigns various weights to radio stations, newspapers and TV stations, based on where consumers say they get their news. It's modeled on an index used in antitrust analysis.

A Nielsen survey of 3,136 people found that nearly 34 percent say they get their news from broadcast TV stations. Radio was listed by 25 percent, while 29 percent get their news from newspapers. The index uses those percentages to weight media outlets in a given city.

In using the index to show whether a market has a diverse number of voices, the FCC's formula considers the number of TV and radio stations and newspapers in the market, the number of owners and the share of the market those owners control.

Ultimately, a city is assigned a number indicating its level of media concentration. A diversity index below 1,000 indicates an unconcentrated market that the FCC says can support consolidation. ``We need to prove to the courts why we're saying no to certain combinations,'' said FCC spokeswoman Michelle Russo. ``When we go to court, we can show it's not arbitrary.''

But some say Powell's rule-making efforts were simply aimed at justifying media ownership changes he's wanted all along. ``They wanted to get these results and they cooked up the justifications to do it,'' said Robert McChesney, president and founder of Free Press, a media policy advocacy group.

McChesney said the FCC ignored hundreds of thousands of Americans who sent letters and e-mails opposed to easing the rules. He said the rules were created as a result of closed-door meetings with lobbyists.

The FCC said its action represents the most comprehensive review of media ownership regulation in its history.