US Free-to-Air TV is At Risk, Warns FCC’s Powell

01 May 2003

Michael Powell, chairman of the Federal Communications Commission and the Bush administration’s deregulation gofer, has raised the spectre of the demise of free-to-air US broadcast television – citing this peril as an argument in favor of relaxing the present media ownership rules.

Powell claims that the rise and rise of cable and satellite TV – which now reaches more than four in every five US citizens – has “dramatically” changed the economics of free-to-air broadcasting to the point where the major broadcast networks are questioning whether to continue no-charge transmissions.

“I think there is a real worry about the long-term survivability of the free over the air medium,” said Powell in an interview Tuesday with the Financial Times. “There is a very easy way for it to collapse, given that 86 per cent of the people are receiving their TV through paid cable or satellite. Twenty five per cent of people are still getting free [broadcast TV] but the economics are becoming dramatically more strained,” he said.

And in a vintage Powell non sequitur he opined: “I think it is very pro-consumer that [broadcast] TV remains a viable distribution system which is competitive with other systems.”

But despite the acendancy of satellite and cable, advertisers still see network programming as the only way to reach a mass audience; while local broadcast stations – many of which are units of the Big Four networks – persist in being highly profitable. Free-to-air TV can respond in similar vein to Mark Twain: “Reports of my death have been greatly exaggerated.”

The FCC’s five commissioners, three Republican and two Democrat appointees, will vote on changes to the ownership rules on June 2.

Data sourced from: Financial Times; additional content by WARC staff