Nets to FCC: Drop ownership curbs

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Three TV networks urged the Federal Communications Commission to eliminate cross-ownership curbs last week, and the National Association of Broadcasters urged the FCC use the very broadest definition of the local ad market. But marketers, agencies and media buyers remained notably silent.

Both issues in the past have enraged media buyers who have contended that consolidation in the radio market drove up ad prices, reduced program diversity and made it difficult for smaller advertisers to buy packages tailored to their smaller geographic needs. The fear is that a similar phenomenon will occur in broadcast TV.

Adonis Hoffman, senior VP-American Association of Advertising Agencies, said his group's media policy committee wanted to see the claims made before making a comprehensive reply.

Media buyers said they will, in time, respond. The proposal to drop all rules "is radical," said Richard Hamilton, CEO, Cordiant Communications' ZenithOptimedia Group. "To simply throw everything out would be a big mistake."


Jon Mandel, co-CEO and chief negotiating officer of Grey Global Group's MediaCom, suggested the proposal to drop all rules that came from General Electric Corp.'s NBC, News Corp.'s Fox and Viacom was "disrespectful to the commission's intelligence" with some arguments based on flawed statistical studies. "This creates a giant transfer of wealth from the American population to the broadcast community," he said. "I don't know why clients haven't woken up unless they think they can just pass it on to consumers."

Broadcasters claimed the ad market wouldn't significantly be affected by dropping rules. They urged to be allowed to own two TV stations in smaller-as well as larger-markets.

"Any [FCC] rule should be technology-neutral and should take into account not only broadcast stations and daily newspapers, but all modern media including the Internet, cable television/DBS, weekly newspaper and regional magazines, each of which should receive equal weight as sources of outlet diversity," said Fox, NBC and Viacom in joint comments.

The National Association of Broadcasters, meanwhile, suggested broadcast ads shouldn't be viewed separately from other ads. "It is contrary to common sense to contend that advertisers are captive to a single medium or that advertisers are forced to maintain their advertising" in the face of price hikes, the group said in its comments.

The Newspaper Association of America also asked for the dropping of the newspaper and broadcast cross-ownership ban.

The three networks suggested that media marketplace changes have outdated the current FCC rules.

"The overwhelming weight of the evidence suggests that today's extraordinarily vast and exceptionally diverse media marketplace provides more than enough competition," the filing said. (Walt Disney Co., filing separately, also said it favored deregulation but commented only on more limited issues.)


Consumer groups opposed the changes, suggesting FCC rules should view concentration separately in each media with the regulations based on ratings or users reached, not the number of outlets owned. They, too, cited advertising as an issue, saying one form of media cannot substitute for another.

"Television, radio, newspapers and the Internet serve different purposes for the public," said a filing from Consumer Federation of America, Consumers Union, the Center for Digital Democracy and the Media Access Project. Jeff Chester, executive director of the Center for Digital Democracy, said that while FCC Chairman Michael Powell has indicated his desire to ease current consolidation rules, the groups are expecting Congress to intervene.

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