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An opinion on proposed changes in FCC legislation

Congratulations! You have just been hired by Diversified Worldwide Industries (DWI), Inc., as the Vice President of Risk Management. DWI is headquartered in West Palm Beach, Florida, and has over 150 offices in 30 countries. DWI is incorporated in the State of Delaware; its ships are flagged by Liberia and the Bahamas.
The Corporation's principal activities are grouped into the following areas:

ENVIRONMENT: Water and water treatment, waste management;
OIL & ENERGY: Exploration, production, transport, refining, wholesale marketing, alternative fuels research;
COMMUNICATIONS: Telecommunications, Internet, audiovisual activities, publishing and multimedia;
LEISURE & RECREATION: Hotels, casinos, cruise ships;
REAL ESTATE: Builds homes and manages properties in active adult, age-restricted communities;
FINANCIAL: Brokerage for capital market investments in Russia, Eastern Europe, China, and emerging markets;
MANUFACTURING: Produces, distributes, markets, exports and imports spirits and wines.
Your duties as the VP for Risk Management will require that you develop knowledge and expertise in all areas of business law, consult with corporate and outside counsel on legal matters, and advise the board as to available options to reduce or minimize the risk and liability of DWI in its ongoing activities.

Task Deliverable Length: 1 page

Some DWI employees have opposed proposed changes in FCC regulations that will allow for more mergers overall in the print media and TV industry, permitting consolidation of up to 45% control in a geographic market prior to the FCC prohibiting further consolidation of media assets. The Editor of Consumer Reports magazine has recently wrote that "free TV and pay TV are completely intertwined. A handful of corporations own and control the vast majority of both." The public relations and lobbying team of the first tier media giants - GE, AOL/Time Warner, Viacom, and Walt Disney Co. - have requested we support the FCC's recommended changes in Congress.

Discuss the legal and ethical implications of the ongoing debate and take a position as to whether the changes should be allowed and would they benefit DWI.

Solution Preview

I think that it would be wise to oppose proposed changes in the FCC legislation to further deregulate the TV industry and print media. As stated at the end of the article, there is already an oligopoly operating in this sphere and further deregulation would only make things worse. It would by all accounts be in the interest of corporate giants like GE, AOL/Time Warner, Viacom, and Walt Disney Co. to reduce government intervention in their sphere, then they, being the dominant players, can rush in and fill the power vacuum. Less power for the government means more for these folks. With the proposed legislative changes, these enormous enterprises, would be able to buy more advertising space for themselves while simultaneously buying the advertising of the smaller enterprises. In effect, buying them right out of the markets, or, to the sidelines.

The DWI employees are right to worry about this legislation, as they may very well experience reduced access to advertising space which could impact their business lines. In the area of water, water treatment, for ...

Solution Summary

This solution concerns the proposed changes in the FCC legislation which will further deregulate the media space. The view taken is that that DWI, Inc. should exercise caution in supporting these changes and they should refrain from endorsing the proposed legislation. Additional notes are available at the end of the solution.