• by Joe Mandese  @mp_joemandese, October 8, 2004

The prospects for regulatory oversight and possibly even new legislation to regulate Nielsen Media Research's control over the TV ratings business became a little more likely on Thursday when an influential lawmaker asked the Federal Trade Commission to consider taking "action to ensure that the television ratings industry is run fairly and in the best interest of the public." In a letter sent to FTC Chairman Deborah Platt Majoras, the lawmaker, Senator Conrad Burns, chairman of Congress' communications subcommittee, cautioned the commission that if "the present situation cannot be remedied within the existing framework, it is my intention to introduce legislation that would mandate specific actions to create an oversight regime to more effectively safeguard the public interest.

While some observers believe Burns' request may have been politically motivated, the move signals that the political controversy surrounding Nielsen's rollout of local people meters has far from died down, and the threat of government intervention appears even more acute. On July 15, following a Congressional hearing Burns convened on the subject, lawmakers seemed to suggest that no legislation might be required and that the government would prefer to let the industry resolve its concerns with Nielsen. However, in a press conference immediately following those hearings, Burns indicated that legislation remained an option. In fact, in the request he made to the FTC on Thursday, Burns invoked elements of the 1966 Harris Commission report, which set up the current self-regulatory structure for the TV ratings industry that has the Media Rating Council at its core. Asserting that the report calls for "consultation among the MRC, FTC and [Federal Communications Commission] about complaints concerning ratings, Burns asked the FTC to get involved.

"It seems clear that Nielsen's action seems to violate both the spirit and letter of the model that Congress established almost 40 years ago," he said.

An FTC spokesperson said the commission does not comment on communications between Congress and the FTC unless specific actions are taken.

In a statement released late Thursday, Nielsen cited some of Burns own language in his letter to the FTC to make its case: "We share Senator Burns' opposition to 'heavy-handed government regulation of private enterprise' and believe that the FTC will find that regulation of the ratings industry is unwise. Such regulation is opposed by the vast majority of the media industry because it would slow innovation at a time of rapid change in entertainment viewing habits and invite the politicization of the ratings process."

Actually, it is the second request made to the FTC this year to investigate Nielsen's control over the TV ratings business. In a request made earlier this year, the American Association of Advertising Agencies asked the commission to look into how Nielsen deals with its customers, especially how it gives them access and control over the data advertisers and agencies need to make their TV buying decisions. The FTC never officially commented on that probe, but sources familiar with the investigation have told MediaDailyNews that the FTC has essentially closed its review without taking any action, though the AAAA still considers the matter open.

The issues surrounding Burns request are different, but no less significant in terms of their implications for government oversight over Nielsen. Whereas the AAAA is primarily concerned with Nielsen's monopolistic control over data access and pricing, the lawmaker's request centers on concerns about Nielsen's local people meter research methods, especially how accurately they represent the viewing of Hispanics and African Americans.

While the advertising industry generally supports Nielsen's rollout of local people meters, which are deemed a better method than the system they are replacing, all sides of the business have been concerned by Nielsen's disregard for MRC accreditation in the matter. Nielsen introduced the local people meters in New York before it had received MRC accreditation, though it has subsequently received "conditional" accreditation for that market. Meanwhile, it's continuing with its aggressive rollout of local people meters in other markets that have yet to receive accreditation.

That disregard has fueled concerns that without any regulatory authority over Nielsen, the MRC essentially is a "toothless tiger" with regards to Nielsen.