• by Wayne Friedman , Staff Writer, January 28, 2005

Media consolidation is still a headache, still a threat, and advertisers are still footing the bill.

Under chairman Michael Powell, the Federal Communications Commission was moving towards wholesale media deregulation. But a federal appeals court last year ordered the FCC to reconsider its action. Now the Bush Administration has decided not to challenge that decision - which critics say effectively kills the FCC's efforts.

No matter -- media consolidation still throws its weight around.

Sure, there are more broadcast and cable options than 20 years ago. But those of any meaning - in terms of ratings and advertising revenues -- are consolidated in the hands of about five major companies. Business leverage is the point and they have plenty to throw around, whether it comes to developing programming, jacking up advertising revenues, or grabbing more distribution.

TV advertisers want the most options to keep prices down. But media consolidation has done just the opposite. In the last 15 years, for example, there have been two times upfront TV program prices have dipped versus the previous year. Prices have risen unabated in periods even when the stock market has suffered or while there have been some poor economic periods.

TV advertisers have threatened to spend more money on cable. But whether they are buying USA Network, CNN, A&E, E!, MTV, or TNT, that money still goes into the hands of large media corporations. And many wonder about the effectiveness of that cable-only plan.

Some broadcast networks point to one fact in their efforts for deregulation: only two network groups -- NBC and CBS -- make money. Still, media companies have many other areas that make big bucks - like their station groups, TV and film divisions, or theme parks.

Critics say media consolidation stifles creativity and creates bland and undifferentiated local newscast. That is still the case - as virtually every network show on primetime has the network as a production partner. That wasn't the case 20 years ago.

Media consolidation is still a problem - and the pricing, production, and distribution structures won't go away anytime soon.