FCC TO REVIEW ALL CROSS-MEDIA OWNERSHIP RULES

Integrated Approach Throws Everything in the Air

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WASHINGTON (AdAge.com) -- The Federal Communications Commission this morning unveiled plans to examine virtually all its media cross-ownership rules as a single package in a move that could dramatically change the American media landscape. Meanwhile, the agency will delay action on individual rules.

At a press briefing Ken Ferree, chief of the FCC's Media Bureau, cited a desire for consistency, a wish for a more analytical approach and recent appellate court decisions as the reasons for the integrated approach.

The U.S. Court of Appeals for the District of Columbia in several recent cases has slammed the FCC for failing to back its media ownership limits with sufficient justification. In several cases the court either overturned existing rules or directed the FCC to reconsider its policies.

The FCC's latest move

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comes as newspapers and some broadcasters hoped the FCC would quickly act to abandon newspaper cross-ownership rules and lift the 35% limitation. The decision could leave the status of several deals in which broadcasters exceed the 35% figure on hold and prompt broadcasters to start acquiring properties in hopes the FCC will eventually weaken existing rules.

'Kissing cousins'
"All of these rules are kissing cousins," Mr. Ferree said. "You can't look at any one in isolation." He added that looking at all the rules would also prevent any one single branch from gaining advantage over another as individual rules are evaluated.

Six critical FCC rules will be included in the integrated review, including:

  • Those that now bar newspapers from buying broadcast stations in their markets.
  • Those that limit any one broadcaster from reaching more than 35% of the nation's households.
  • Those that limit the ownership of local radio stations by one company in a single market.
  • Those that limit when broadcasters can own more than one TV station in a market.

Mr. Ferree said the FCC expects to propose a new rule or new rules next spring, but will release studies this fall that will guide its action.

One of the studies will examine the impact of how advertisers view different media and their interchangeability. This could play an important role in how far the FCC would allow any single company to dominate a single market. One of the questions expected to be asked is whether dominant ownership of one form of media -- local radio, for instance -- might be acceptable because marketers can switch to other forms of media.

Others will look at historical patterns of station ownership; how easy it is for consumers to substitute one media for another; and the relationship between ownership and local programming, diversity and local news.

Newspaper group disappointed
The Newspaper Association of America, which had hoped for immediate changes in the newspaper cross-ownership rule, expressed its disappointment with today's decision.

"It is another a delay," said the association's president-CEO, John Sturm. "While the commission sorts through what everybody else should get, we get nothing."

Mr. Ferree said there are no plan to examine the impact of concentration on local cable rates.

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