As a DWI employee, I do oppose proposed changes in FCCs that will allow for more mergers overall in the print media and TV industry, which will permit consolidation of up to 45% control in a geographic market.
The legal aspects of this FCC change include the breach of the antitrust law which prohibits monopolies and unfair methods of competition such as hostile take-overs and acquisition through stock purchasing. The implications of allowing mergers in the print and media industry would be immense since it is a strategic industry where public interest may be threatened due to the dominance of a few businesses with the capacity to stiffle healthy competition. (Kovacic & Shapiro, 4) Allowing mergers between gigantic businesses will affect the competing capability of small companies and in the long run may wipe them out through acquisition of the giant companies.
Another legal issue that may arise from the proposed changes in FCC regulations is conflict with the blue sky laws or securities laws and regulations enforced by different states in the United States. Allowing mergers would be problematic in terms of stock and securities sales due to the variance in laws governing business activities including stock sales, registration, and transfers across states.
The ethical aspects of this FCC change include the possible violation of workers’ rights from massive lay-offs or downsizing. Mergers between media giants would affect workers who usually are not part of the decision-making process and are not consulted about buy-outs or stock sale decisions although they are usually the ones affected by job redundancy decisions, reorganization, and work shifts when the merger pushes through. It would also undermine the right of employees and workers to labor union representation as the merging of two companies would create conflict in the existence of two unions.
Another ethical issue that must be considered is the protection of consumer’s rights to quality and trustworthy products. (Tyson Foods, Inc.) Permitting mergers of up to 45 percent control in a geographic market will put consumers at the mercy of a few media companies, severely limiting their choices in terms of products and offerings. In the same manner, this would inhibit innovation spurred by competition and in the long run affect product quality and integrity.
This is disastrous for the media and communications industry as the monopolization of a few companies will reduce the public’s option in information and communication products and limit their influence in business decisions with regard to product pricing and quality.
Likewise, allowing more mergers in the print and media industry would be against the moral clause (Hinman, 2002) as it would pave the way for the concentration of capital and resources in the hands of a few giant companies. It would create an unfair advantage in favor of the first tier media giants such as GE, AOL/Time Warner, Viacom, and Walt Disney Co. who will have the ability to control a large portion of the market to the detriment of minor industry players. The changes in the FCC will prevent others from benefitting from society’s wealth and enable the media giants to disregard of the right of other media businesses and other stakeholders to fair business competition and a level playing field.
I believe these changes would not benefit DWI because it would seriously affect the competitiveness of the company in the communications industry and at the same time jeopardize public interest in fair and trustworthy business activity.
Hinman, Lawrence (2002). Basic Morals Orientation Overview. Retrieved March 25, 2008 from http://ethics.sandiego.edu/presentations/Theory/BasicOrientations/index_files/frame.hml
Kovacic, W.E. & C. Shapiro, (1999). Anti-trust policy: a century of economic and legal thinking. Working Paper No. CPC99-09. University of California, Berkeley: Competition Policy Center.
Alvarez, Richard I. & Astarita, Mark J (2007). Introduction to the Blue Sky Laws. Retrieved March 25, 2008 from http://www.seclaw.com/bluesky.htm#A1
Tyson Foods, Inc.(2006). Company Information. Retrieved March 25, 2008 from http://www.tyson.com/Corporate/AboutTyson/CompanyInformation/