Report from the Newspaper Assoc. Conference

FCC CHIEF: MEDIA CONSOLIDATION SERVES PUBLIC

Says Assumptions to the Contrary Are 'Simply False'

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SEATTLE (AdAge.com) -- Speaking before an audience of newspaper executives, Federal Communications Commission Chairman Michael Powell gave a forceful, technologically-savvy
Photo: AP
FCC Chairman Michael Powell spoke favorably about deregulation.
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address linking a muscular deregulatory theme with rhetoric that equated ongoing technology advances with the democratization of media.

Mr. Powell's address, delivered this morning at the Newspaper Association of America convention here, drew a line between the FCC of yore, and the media world it oversaw, with the one of today.

'Zookeepers'
The FCC of the past, he said, acted under the belief that "the public good is served by a few [media] producers governed by powerful regulators." He compared that FCC to "zookeepers," deciding how charges were fed, whether the portions were fair, how much freedom they warranted and when they were "allowed to mate and have babies."

He sought repeatedly to contrast this "narrow-band, monopoly-regulated" media world with a broadband world with a "broader view of regulation."

Newspaper publishers -- and all other media executives -- anxiously await the FCC's promised June 2 deadline for announcing new rules governing consolidation of media cross-ownership regulations.

Overturn old rules
The FCC is expected to overturn rules that restrict newspapers from owning radio and TV properties in their same market. On this point, Mr. Powell said "it is difficult to maintain the rule in its current form." Later, he said that the assumption that the public interest was served by regulating against concentrated media ownership "is simply false."

But the Senate Commerce Committee, which oversees the FCC, has taken a more wary attitude toward such change, and one senator on the committee in particular -- Sen. Olympia Snowe, R-Me. -- is accelerating a potential challenge to the FCC ruling. Mr. Powell didn't address the brewing tumult in Washington.

At least one key newspaper executive who heard today's speech shied away from forecasting what June 2 might bring. But Douglas McCorkindale, chairman-CEO of Gannett Corp. the nation's largest newspaper publisher -- and one that could benefit substantially from relaxed regulation -- said Mr. Powell's talk amounted to a "rather positive assessment" of potential changes in cross-ownership regulation.

Still, Mr. McCorkindale said he would "wait and see what happens. I've been around [the FCC] for 28 years."

Will serve consumers better
One attendee, indicating how small-market papers are currently hurt by not being able to own radio stations, asked how newspapers would fare when the regulations concerning radio ownership are released. "They're likely to fare well," Mr. Powell began, before pitching a public policy argument against the current cross-ownership ban, saying that that some of the few existing radio-newspaper ownership combinations resulted in those stations winning "substantially more" awards than stand-alone stations -- indicating, he said, that such combinations served consumers better.

In brief remarks to reporters afterward, he cited such combinations in Chicago as a specific example, though he allowed that other unspecified issues about combinations involving radio were still a cause of some concern.

The moves in the Senate aside, it's clear many newspaper executives bank on Mr. Powell's themes winning the day. The speaker that followed him, W. Dean Singleton, chairman-CEO of the Media News Group and outgoing chairman of the Newspaper Association of America, spoke of how cross-regulation changes will leave daily newspapers poised to offer formidable combinations of TV footage and their own reporting on the Web in real-time.

Bad prediction
In a reflection of how newspapers were dragged into a more technologically friendly future against their instincts, Mr. Singleton ruefully admitted that early on he predicted the Internet would have as much effect on newspapers "as CB radio" did.

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Ira Teinowitz contributed to this report.

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