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FCC Chief Offers New Plan on Cross-Ownership

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ago, the agency tried to eliminate the cross-ownership rule in all but the nation's smallest cities, arguing it was outdated in an era when local news and information was available from a variety of sources, many of them online.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

Martin said his plan was designed to grant relief to newspapers, now in worse shape than they were in 2003, while addressing the concerns of anti-consolidation forces.

"We sought a compromise that could accommodate both sides," he said in a conference call. "I think this is a balanced approach that addresses concerns about the impact newspapers do have in their markets, and the largest television stations, too, while rightfully addressing the financial issues faced by newspapers."

Although the FCC does not regulate newspaper ownership, it is part of the agency's charge to ensure a variety of local outlets for news and information.

The Newspaper Association of America, the trade group that represents the nation's newspapers, repeated its contention that cross-ownership should not be banned.

"The fundamental issues he raises concerning the vitality of newspapers and assuring that local news remains available to the public in print and in broadcast are not confined to the top 20 markets," said John F. Sturm, president of the association. "The radical and irreversible market changes that have occurred in every community since this rule was adopted more than 30 years ago have extinguished any basis for this across-the-board ban."

In addition to limiting cross-ownership to the largest markets, Martin's proposal would:

¿ Allow a newspaper to own either a television station or radio station, but not both, in the same market.

¿ Permit a newspaper to buy a TV station only if the deal would leave at least eight other independently owned newspapers or television stations in the city.

¿ Prohibit a newspaper from buying one of the top-four rated television stations in a city.

Martin needs two other votes from the agency's five commissioners for his plan to pass. Two of them, Michael J. Copps and Jonathan S. Adelstein, opposed it yesterday, calling the proposal a "wolf in sheep's clothing." Both argue that the proposal would make it easy for a newspaper in markets outside the top-20 to receive an FCC waiver to buy a television station.

"This is the camel's nose under the tent," Copps said. "When the industries have pushed hard, the history of this commission is to give a receptive ear."

William Dean Singleton, chief executive of Media News, one of the nation's largest newspaper chains, based in Denver, had hoped to buy television stations in markets where he owned newspapers in 2003 but had to abandon those plans when the court remanded the rules. Martin's proposal wouldn't help him buy stations or aid local news, he said.

"I think the commission missed the boat," Singleton said. "It's the smaller markets that are losing television news" and need the relief of cross-ownership, he said.

As an example, Singleton cited Farmington, N.M., where he owns a paper. The last local television news broadcast signed off this year, he said, because the station could no longer afford a news operation.

Sens. Byron Dorgan (D-N.D.) and Trent Lott (R-Miss.) introduced legislation this month designed to postpone the Dec. 18 vote by requiring a 90-day public comment period on any proposed FCC rule changes.

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