FCC Approves Plan to Eliminate Cross-Ownership Ban

Broadcasters and Newspapers Could Be Owned By Same Company in One Market

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WASHINGTON (AdAge.com) -- A divided Federal Communications Commission approved what could be the biggest change in the country's media ownership rules in more than a decade, allowing cross-ownership of newspapers and broadcasters in the same market.
Critics said FCC Chairman Kevin J. Martin rushed the decision to change the cross-ownership rules, but according to Mr. Martin, 'For a year and half I have attempted to respond to legitimate concerns. At each step as I was crossing the goal line the goal line was moved. I've finally reached a view that it is impossible to achieve consensus.'
Critics said FCC Chairman Kevin J. Martin rushed the decision to change the cross-ownership rules, but according to Mr. Martin, 'For a year and half I have attempted to respond to legitimate concerns. At each step as I was crossing the goal line the goal line was moved. I've finally reached a view that it is impossible to achieve consensus.' Credit: Jim Ruymen

On a 3-2 party-line vote, the FCC approved Chairman Kevin J. Martin's plan to eliminate its more than 30-year-old ban on cross-ownership. Instead, newspapers will be able to buy any broadcast station that isn't among the Big Four networks in the top 20 markets; publishers may also be able to buy broadcasters in smaller markets by promising to add at least seven hours of news a week to the acquired stations' programming.

Last-minute changes
In a last-minute change, the FCC gave permanent waivers to newspapers and TV stations in 42 markets that already have cross-ownership, some in violation of the new rule. All will get permanent waivers, a move that will allow Gannett to keep the Arizona Republic and a Phoenix station; Media General to keep four stations and newspapers; and Shamrock Communications to keep a broadcast property and newspaper in Scranton, Pa.

The FCC also added a new exception that will let TV stations and newspapers buy "failing" rivals, despite the new requirement, and allow News Corp. to keep two TV stations in New York as well as the New York Post.

By taking its vote, the FCC rejected all calls for delays from consumer groups and senators who warned the FCC didn't sufficiently understand the potential impact consolidation would have on local programming. Others warned that the rule change reduced opportunities for minority-owned and women-owned businesses to buy broadcast properties, and that enough time hadn't been provided for the public to comment on a final proposal.

Despite the vote, the fight is far from over. Some legislators promised to try to overturn the FCC vote in Congress.

Andrew Jay Schwartzman, president-CEO of the Media Access Project, called the FCC action "an extreme and unjustified change" and said today he would challenge the latest FCC action in court. "Unless Congress intercedes, we're going to have to go back to court to make sure the public isn't harmed by this ill advised action," he said.

Previous attempts to re-write rules
Today's vote caps a saga that began in 2004 when a previous attempt to ease media ownership rules under former Chairman Michael Powell was rejected by an appellate court and sent back to the FCC. Mr. Powell had proposed far broader changes that would have allowed one company to own three TV stations, eight radio stations, the local cable system and the local newspaper in big markets.

Mr. Martin offered a more limited proposal, but it would still be the biggest change in FCC rules since Congress passed a revision of communications rules in 1996.

The cross-ownership proposal was offered by Mr. Martin and supported by Deborah Taylor Tate and Robert McDowell, but angrily opposed by Democratic commissioner Michael J. Copps and Jonathan Adelstein.

"It's a terrible decision," Mr. Copps said. "In the final analysis, the real winners today are businesses that are in many cases quite healthy, and the real losers are going to be all of us who depend on the news media to learn what's happening in our communities and to keep an eye on local government."

Both he and Mr. Adelstein charged that the last-minute changes were offered in the dead of night with no public input, and represent a major concession to broadcasters.

Mr. Martin, Ms. Tate and Mr. McDowell all argued that the rule changes were "modest" and Mr. Martin rejected that there was any rush to judgment.

'Impossible to achieve consensus'
"I reject the claim that the process has been unfair or too rushed," he said. "For a year and half I have attempted to respond to legitimate concerns. At each step as I was crossing the goal line the goal line was moved. I've finally reached a view that it is impossible to achieve consensus."

The vote was among a series of major steps the FCC took on Tuesday. The commission also:

  • Approved a series of proposals in a bid to aid minorities acquire broadcast stations. Minority groups criticized the proposal, saying the proposals mostly benefit small businesses rather than minority-owned companies and could hurt minority companies.

  • Revisited and reiterated its rule barring any single cable company from serving more than 30% of the nation's cable subscribers. An appellate court has sent the rule back to the FCC for review.

  • A third proposal -- to launch a rule-making proceeding to examine whether new examples of product placement and integration of products into TV shows are warranted -- was delayed.
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