FCC Chief Offers New Plan on Cross-Ownership

Changing Media Markets
SOURCE: Nielsen | The Washington Post - November 14, 2007
By Frank Ahrens
Washington Post Staff Writer
Wednesday, November 14, 2007

The chairman of the Federal Communications Commission yesterday proposed relaxing an agency rule to allow big-city newspapers to buy the smaller television stations in their markets, a move designed as a compromise in the ongoing issue of corporate control of the airwaves.

The proposal put forward by Chairman Kevin J. Martin appeared to please almost no one -- the newspaper industry said it stopped short of helping the ailing print media and anti-consolidation groups said it went too far, with one calling it "yet another massive giveaway to big media."

Under Martin's plan, set for a commission vote Dec. 18, newspapers in the nation's 20-largest media markets could buy one radio or television station in their cities, if certain conditions apply. The station could not be among the four most-watched in the market, essentially preventing newspapers from buying popular stations affiliated with ABC, CBS, NBC or Fox.

The proposal would partially lift a 35-year-old ban on the "cross-ownership" of newspapers and broadcast stations. Although Martin's plan would not automatically ban cross-ownership in the nation's smaller 190 media markets, it is unlikely such purchases would be approved by the FCC, he said.

The ban was enacted in 1972, when newspapers and television stations dominated news and information and the FCC feared concentration of local media ownership.

Four years ago, the agency tried to eliminate the cross-ownership rule in all but the nation's smallest cities, arguing it was outdated in an era when local news and information was available from a variety of sources, many of them online.

Several newspaper companies, including Tribune, Belo and Media News Group, fought for the rule's eradication, saying it was crucial that they be allowed to buy television stations to spread the high cost of newsgathering and to add television advertising revenue to their shrinking circulation and print advertising revenue.

In smaller cities, they argued, such cross-ownership would provide more ways for people to get news.

But anti-consolidation groups vehemently disagreed, saying it would place too much power in the hands of a few moguls. The FCC's attempt to lift the ban was eventually rejected by a federal court, which said that the agency had not adequately justified its reasons for striking it down.

Martin said yesterday that he saw no reason to loosen other ownership rules, such as one saying a company cannot own more than two TV stations in the same city.

Today, as the Internet has grabbed some of television's hold on viewers, fewer newspaper companies see a financial advantage in owning television stations. Tribune has continued to push hardest for lifting the ban, thus ending the need for the waivers it has for owning newspapers and television stations in New York, Chicago, Los Angeles and Fort Lauderdale. But the company most likely will have to sell either its newspaper or television station in Hartford, Conn., which is not among the top 20 markets, Martin said.

In a letter to Tribune employees yesterday, chief executive Dennis FitzSimons said the company would ask the FCC to permit cross-ownership in smaller markets.

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