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 April  19,  2001 
 Separate  Statement  of  Commissioner  Susan  Ness 
 In  re:  Amendment  of  the  Commission’s  Rules  –  The  Dual  Network  Rule,  MM  Doc. 
 No.  00-  108 


 It  is  important  to  point  out  what  this  Order  does  not  do. 
 The  Commission  does  not  relax  the  existing  prohibition  on  mergers  among  the  top  four 
 broadcast  networks.  While  the  item  points  out  that  the  issue  of  mergers  between  the  top 
 four  networks  was  not  raised  in  the  Notice,  I  believe  that  a  combination  of  any  of  the  top 
 four  broadcast  networks  would  dangerously  diminish  source  and  viewpoint  diversity  in 
 the  United  States.  As  the  item  points  out,  the  four  major  broadcast  networks  are  unique 
 among  the  media  in  their  ability  to  reach  a  wide  audience.  Even  though  network  ratings 
 have  declined  over  the  last  twenty  years,  those  ratings  still  far  outpace  any  other  video 
 platform.  Moreover,  the  competition  between  network  news  operations  serves  an 
 important  First  Amendment  function  by  encouraging  journalistic  rigor  and  a  relative 
 variety  of  editorial  priorities  and  viewpoints.  Even  in  an  era  of  24-  hour  cable  news 
 networks,  the  ratings  dominance  of  the  broadcast  networks  should  lead  future 
 Commissions  to  hesitate  before  diminishing  competition  and  diversity  among  the  top  four 
 broadcast  networks. 


 This  item  also  does  not  implicate  other  media  ownership  restrictions.  As  the  competition 
 analysis  makes  clear,  the  provision  of  the  dual  network  rule  at  issue  here  identifies  a  very 
 small  universe  of  affected  parties:  UPN  and  the  WB.  By  allowing  mergers  involving 
 these  two  “weblets,”  the  Commission  willingly  diminishes  source  diversity,  something  I 
 ordinarily  resist,  in  order  to  maintain  outlet  and  viewpoint  diversity,  something  I  strongly 
 support.  The  net  benefit  to  diversity  through  the  preservation  of  small,  niche-  oriented 
 broadcast  networks  leads  me  to  support  this  action. 


 Finally,  the  economic  analysis  in  this  item  carefully  avoids  sweeping  assumptions  about 
 possible  public  interest  benefits  accruing  from  post-  merger  economic  efficiencies.  While 
 vertical  integration  tends  to  reduce  transaction  costs,  and  horizontal  mergers  tend  to 
 reduce  redundancies,  it  is  not  at  all  clear  to  me  that  the  resulting  savings  to  the  merged 
 entity  are,  ipso  facto,  passed  on  to  the  consumer  in  the  form  of  an  improved  product. 
 That  certainly  is  a  theoretical  possibility.  But  in  the  real  world  of  media  mergers,  I 
 believe  it  is  a  dangerous  assumption  that  larger  entities  will,  by  virtue  of  their  increased 
 efficiency,  produce  better  programming,  more  news,  or  wider  arrays  of  editorial 
 positions.  Rather,  the  Commission  should  remain  vigilant  in  preserving  the  vibrant  and 
 competitive  media  marketplace  that  will  encourage  media  companies  to  channel  their 
 resources  toward  a  better  product. 
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