FCC to Revisit Media-Ownership Rules
Commissioners Face Changed Landscape

By Frank Ahrens
Washington Post Staff Writer
Thursday, June 22, 2006

The Federal Communications Commission voted yesterday to take up the controversial topic of media ownership, two years after the agency's last attempt to craft new rules was tossed out by a federal court.

With yesterday's vote, the FCC said it will attempt to set rules governing the number of radio and television stations that companies can own in one city, cross-ownership between newspapers and television and television and radio, whether one company may own more than one television network and whether UHF stations should count toward total national station ownership.

At stake are issues basic to the modern media marketplace and democratic dialogue. Often, the two are at odds. How many television stations should one company be allowed to own in the same city? Should the biggest newspaper in town own the most popular local television station? Does having a variety of owners ensure a variety of voices? Is there such a thing as too much media power?

"The media-ownership issue is very, very important to a lot of people, and it can be very contentious. I think it's very daunting," said FCC Chairman Kevin J. Martin. "On the other hand, the courts have remanded these rules, and we were supposed to respond to them years ago."

However, the media landscape is different today than it was four years ago, when the FCC began the process of revising ownership rules. Then, big companies such as CBS Corp., Clear Channel Communications Inc. and Gannett Co. were clamoring to add more properties.

News Corp. wanted to buy second television stations in cities where it had only one, creating money-saving duopolies like it has in the District, where it owns WTTG (Channel 5) and WDCA (Channel 20). Mel Karmazin, who was president of Viacom Inc. at the time, called it crucial to his company's future that it be allowed to add more high-profit television stations to the CBS chain. And newspaper companies, such as Belo Corp., wanted to purchase more television stations.

Since then, the promises of "corporate synergy" have dimmed, and multimedia companies such as Tribune Co. and Time Warner Inc. are selling pieces of their empires.

Thus, though the FCC is likely to allow some form of television-newspaper cross-ownership, there may be less demand for it now than there was three years ago. Tribune, for instance, appears to be getting out of the television business.

Proponents argue that combining the resources of newspapers and television stations provides better local news to consumers. Opponents say it gives the companies too much sway over local events and opinions. The FCC will take comments on media ownership for four months. Also, the agency will study how consumers get their news, the impact of local ownership, minority participation in ownership and other factors before proposing any new rules.

In 2003 -- in a quarrelsome 3 to 2 vote along party lines -- the five FCC commissioners acted to relax certain ownership rules and tighten others, prompting criticism from lawmakers and interest groups. Opponents filed a suit to block the new rules, and the U.S. Court of Appeals for the 3rd Circuit ultimately sent them back to the FCC for retooling. The court did not argue with the rules but said the FCC had done a poor job of justifying them. The court, for instance, agreed that the newspaper-television cross-ownership ban should be lifted.

The architect of the 2003 rules was then-FCC chairman Michael K. Powell. The Republican was criticized, even by some FCC commissioners, for not seeking enough public input. Specifically, Democratic commissioners Jonathan S. Adelstein and Michael J. Copps said the public should have been able to review the proposed rules before the FCC voted on them.

The debate could be just as contentious this time. Yesterday, Adelstein said he was unhappy because he could not secure a commitment from Martin that any rules changes would be revealed to the public before an FCC vote.

Martin said that it is too early in the process to commit to a second round of public comments but that he would not rule out the idea.

The hottest issue in the previous rules debate is already off the table -- how many television stations one network can own. In 2004, Congress passed a law forbidding any network from owning a group of stations that reaches more than 39 percent of the national television audience. That figure was arrived at in deference to CBS, whose 39 stations reach exactly that percentage of the national audience, meaning the company would not have to sell any of its stations to comply with the new law.

That leaves as major issues the capping of local radio and television ownership and newspaper-television cross-ownership.

A ban on newspaper-television cross-ownership was put in place in 1975; the previous commission tried to lift it in all but the smallest cities. Cross-ownership exists in some cities, such as Phoenix, which were either grandfathered into the ban or received waivers from it. Powell's FCC pointed to those cities as examples where pooled resources provide superior local news.

The court's decision delayed the expansion plans of several media companies that wanted to buy more properties but feared being forced to sell them if new, tougher rules were put in place.

William Dean Singleton, chief executive of MediaNews Group Inc., which owns 40 newspapers, said yesterday that he had several television station purchases under contract in 2003, anticipating the lifting of the cross-ownership ban. When the court overturned the rules, he had to drop out of the deals. Now, he has his eye on some other stations.

Cross-ownership, he said, ensures the future of the news business because "you take the high cost of news gathering and spread it across multiple platforms and you get multiple revenue streams."

Asked about diminishing competition, Singleton pointed out that Denver, where his company owns the Denver Post, has multiple radio and television stations. "If we had one station, there would still be plenty of diverse competition," he said.

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