Divided FCC Enacts Rules On Media Ownership

By Frank Ahrens
Washington Post Staff Writer
Wednesday, December 19, 2007

The Federal Communications Commission relaxed one media-ownership rule yesterday and held the line on another. Both decisions are likely to be challenged in federal court.

By a 3 to 2, party-line vote, the commission partially lifted a 32-year-old ban that prevents a newspaper owner from also owning a radio or television station in the same city.

In a separate, 3 to 2, split-party vote, the FCC reestablished a national cable television ownership ceiling at 30 percent, meaning one company cannot have more than 30 percent of all cable subscribers.

The meeting lasted more than three hours and included some heated language among commissioners. One, Michael J. Copps, called the newspaper-broadcast ruling "today's terrible decision."

The partial lifting of the ban would allow a newspaper in one of the nation's top 20 media markets to merge with a radio or television station in the same market, as long as the television station is not among the four highest-rated in that city. Mergers could occur in smaller markets, but they would have to pass a number of tests, including a demonstration that the newspaper was in financial distress.

The commission also approved waivers in a number of cities, including Phoenix and Myrtle Beach, S.C., that will allow existing newspaper-television combinations to continue.

The relaxation of the so-called cross-ownership rule was championed by FCC Chairman Kevin J. Martin and supported by his fellow Republican commissioners, Robert M. McDowell and Deborah Taylor Tate. Copps and fellow Democratic commissioner Jonathan S. Adelstein opposed it.

Adelstein called the new rule "a monumental mistake" and, with Copps, called it a gift to media companies that will enable consolidation and restrict the diversity of voices on the airwaves.

Martin responded by taking the unusual step of directly addressing Copps's and Adelstein's complaints that the process was conducted without sufficient public comment, citing instances in the past where he said each of them had negotiated deals that were outside the public's view. Martin said he would never achieve a commission consensus on media ownership and that Copps and Adelstein were determined to delay action on the matter to avoid a resolution.

"I don't raise these issues to attack any of my colleagues," Martin said, detailing the many months of study that led to yesterday's vote. "Every time as I was crossing the goal line, the goal posts were moved."

The cross-ownership rule met with criticism from Sens. Barack Obama (D-Ill.), John F. Kerry (D-Mass.) and Olympia J. Snowe (R-Maine), House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.) and some anti-consolidation groups. All said the rule would lead to fewer local voices in news and information.

Kerry and other senators have threatened congressional action to overturn the cross-ownership rule or deny federal funding to the FCC to implement it.

Proponents of the rule change said it would mean more local news, with television stations drawing on newspaper reports and newspapers able to offset the cost of newsgathering with television advertising revenue.

Newspaper companies fought hard for the rule change five years ago, but showed less interest in it this time because of changing market conditions in the television business. In the past, newspapers saw the high profits of television stations and envisioned significant cost-saving synergies between the properties. But that strategy was crippled by the rise of Internet video, which ate away at newspaper readers, television viewers, and the revenue of both mediums.

The Newspaper Association of America offered mild applause to the cross-ownership ruling. It is "a baby step in the actions needed to maintain the vitality of local news, in print and over-the-air, in all communities across the nation," association President John F. Sturm said in a written statement.

This was the FCC's second attempt to relax the rule. A broader attempt in 2003 was remanded to the FCC by the U.S. Court of Appeals for the 3rd Circuit in Philadelphia, which said the agency did not adequately justify its reasoning. The new rule is expected to face legal challenge from a number of groups, including the Media Access Project.

A 30 percent national cable ownership cap was struck down by the U.S. Court of Appeals for the D.C. Circuit several years ago. Yesterday, Comcast, the nation's largest cable company, with about 27 percent of all subscribers, predicted that it would be reversed in court again, calling the FCC vote "perverse."

Copps and Adelstein joined Martin in voting for the ownership cap, while Tate and McDowell opposed it.

In an interview, Copps predicted that yesterday's vote would withstand a court challenge because the FCC has better justified its reasoning.

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