Unusual Alliance Seeks to Block Loosening of Media Consolidation Rules

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WASHINGTON (AdAge.com) -- The American Association of Advertising Agencies is linking with consumer groups in an unusual alliance to fight the weakening of media consolidation curbs by the Federal Communications Commission.

Consumers Federation of America, Consumers Union and some minority-owned media companies are working with the Information Policy Institute, which has been enlisted by the 4A's to provide an economic analysis of media consolidation. The groups plan to share data, information and terminology on consolidation's effects and may file joint comments with the FCC opposing consolidation, though that isn't yet certain. The groups could instead file separate comments based on the same data and studies.

A competitive market
"We share [the 4A's] concerns,"

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said Mark Cooper, director of research for Consumers Federation of America. "They have an interest in a competitive market. We have an interest in a competitive market."

Gene Kimmelman, director of Consumer's Union Washington office, said there has been no formal accord, but "we are discussing the issues."

"Competition gives consumers greater diversity of choices and voices while giving advertisers the opportunity to bargain for lower ad prices," he said.

The unusual partnership comes as agency media buyers and consumer groups warn about the effect of growing media concentration even as marketers themselves sit silent. The Association for National Advertisers said this week it has no plans to oppose consolidation in the current FCC review of virtually all its media ownership and cross-ownership rules.

Fearing ad price hike
Members of 4A's media policy committee have expressed fears that further consolidation will hike ad prices, homogenize programming and set minimum buy coverage areas in ways that make it harder to buy media for particular geographic and demographic needs. Consumer groups, meanwhile, worry that the consolidation will eliminate local voices and programming.

"We are not primarily concerned about advertising," said Mr. Cooper, but also, for example, that the local TV station covering the school board may not have the resources to do so. "There is a perfect commonality of interests though we come at it for different reasons."

The Information Policy Institute studied media consolidation as part of a lawsuit that Boston-area car dealer Prime Communications, filed against AT&T. That suit contended AT&T tried to use its local cable monopoly to force advertisers to buy its cable ads and other products and force out a competitor. Consumers Federation gathered extensive information for comments it filed last year opposing easing of the current FCC rules against newspapers buying broadcasters in their market areas.

'Confluence of interests'
Information Policy Institute President Michael A. Turner said that "a confluence of interests" unite ad agencies and consumer groups opposing media consolidation.

"Right now ad agencies can leverage against a rich number of media outlets, and get the best rates. If concentration is instead on the supply side, giving agencies reduced power, rates will go up, and marketers will have to pass it on to consumers," he said.

Consumer groups, meanwhile, are worried about local news. "In a number of markets the local newspaper is basically surviving. Yet radio concentration has gutted local programming and what has suffered is the dissemination of local news and local programming," Mr. Turner said.

The FCC has suggested that more concentration would give media companies incentive to diversify programming. "We will be addressing that. In reality, that is false. It makes advertising as a means of disseminating marketer information more expensive and it is erecting an economic barrier for small and medium businesses, dampening competition," he said.

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