"Hello Kettle? It's the Pot Calling ... " Nexstar's Ironic Monopoly Challenge

Major media companies don't often like to use the "M" word (monopoly) to describe their competition. After all, it might draw attention to their own vast media holdings. But this week, Nexstar Broadcasting Group, Inc. couldn't hold back, and flung the word against Granite Broadcasting Corporation -- along with an antitrust lawsuit. 

The gist of Nexstar’s complaint is that Granite controls too many media outlets in Fort Wayne, Ind., which gives Granite unfair market power and makes it hard for Nexstar to compete. Along with owning WISE-TV, which airs both NBC and MyNetwork programming on its multicast channels, Granite also runs the advertising arm of Malara Broadcasting's WPTA-TV, which runs ABC and CW programming on its channels.  And beginning next month, Granite also will be broadcasting Fox programming from one of WISE's digital channels.

Nexstar released this statement about the lawsuit:

[G]ranite’s actions to monopolize advertising sales in Fort Wayne will allow it to raise advertising rates to local businesses that are dependent on a fair and competitive television network marketplace. The increased advertising rates will likely drive increases in the prices of goods and services for consumers as well.

Nexstar's right -- consumers will pay. Granite’s monopoly on ad sales diminishes its stations’ incentive to boost their ad rates by earning top ratings. Because advertisers have no where else to go for TV advertising, Granite doesn’t have to worry so much about serving local audiences with the TV programming they want and need, specifically through the news programming where many local stations try to set themselves apart from their competitors.

Granite has amassed so much control of the Ft. Wayne market using a practice called “covert consolidation,” in which broadcasters sign agreements to control operations, ad sales and programming for other stations, leaving consumers with the same news and information on several channels. Rather than trying to out-scoop each other for the best story and delivering the best reporting, companies are simply colluding to give us the same story. We get less independent news coverage, less diversity, and fewer viewpoints while broadcasters grow their local empires.

Before you feel sorry for Nexstar, bear this in mind: the company is among the worst covert consolidation offenders, along with its frenemy Granite. Nexstar currently occupies 19 points on our “Change the Channels” map – an interactive tool that shows where newsrooms are quietly merging across the country. In Peoria, Ill., Granite and Nexstar control all five of the market’s TV stations between the two of them.

Here's what we can take away from this pot-meets-kettle lawsuit: even covert consolidators think covert consolidation is bad for competition.

It’s obvious; covert consolidation has the same impact on communities as traditional media consolidation. The public knows it; broadcasters admit it. Now we need the Federal Communications Commission to act on it. Help us push back against covert consolidation across the nation.