The Federal Communications Commission is expected to approve two major broadcast mergers today and a number of special requests made by buyers.
The decisions will probably elicit congressional hearings on a number of related communications policy questions, said Capitol Hill sources.
FCC sources said the agency is expected to approve the first transfer of ownership of a television network -- that of American Broadcasting Cos. to Capital Cities Communications Inc. in a $3.5 billion "friendly" merger deal. The agency will also approve Australian press baron Rupert Murdoch's acquisition of a chain of independent television stations from Metromedia Inc. for over $1.5 billion, the sources said. Murdoch and Capital Cities also are seeking temporary waivers of FCC multiple ownership rules.
"I would expect that the commission will approve both mergers, and the major requests will be granted," said an FCC source.
Murdoch, whose acquisition has been challenged by half a dozen petitioners on financial and public interest grounds, will acquire stations in Washington, New York, Chicago, Houston, Dallas and Los Angeles. One Boston TV station will be purchased and spun off to the Hearst Corp. for $450 million.
Murdoch has become an American citizen to acquire the properties and will make a public stock offering to finance the transaction. That capitalization plan must still meet with Securities and Exchange Commission approval.
In the uncontested merger of Capital Cities and ABC, the commission, which has "multiple ownership" rules that prohibit the ownership of more than one radio, television or newspaper in the same market, will waive its rule for Capital Cities in the first action of this magnitude, FCC sources said. The company will be allowed to retain WABC-TV in New York and WPVI-TV in Philadelphia, sources said. Because the television signals from the two stations overlap, normally the FCC would require one of the stations to be sold.
"These are two different markets; they don't really overlap as far as the commission can see," one source said. Congress views such a permanent waiver favorably because Capital Cities has promised to devote studio resources and and coverage to Southern New Jersey, said Capital Hill sources. New Jersey and Delaware have had the least amount of high-powered VHF stations in the country.
The FCC will also grant Capital Cities waivers of up to 18 months to dispose of some of its radio stations, the sources said.
Capital Cities will also be permitted "reasonable period of time," to dispose of its cable properties. Virtually all of the systems have been sold to The Washington Post Co. for $350 million in cash, but 53 of the 55 cable systems must meet with local approval at the county level. That "may take some time because of local franchising clearances," said one FCC source. Capital Hill sources said because Capital Cities is already making an effort to sell some properties to minorities the waivers will promote diversity.
The FCC will also allow Murdoch two years to divest The New York Post and the Chicago Sun Times, which conflict with ownership of other media in those markets, sources said. Murdoch argued that he needed time to sell the papers to avoid either closing or "distress" sale of the properties.
News of the FCC's plan to grant Murdoch two years to dispose of stations, rather than the usual 18 months, met with an excoriating letter from four congressmen yesterday.
"We are extremely concerned about the lack of a coherent policy at the commission with respect to the granting of waivers of the cross-ownership rules," wrote Reps. Timothy E. Wirth (D-Colo.), Rep. John Bryant (D-Tex.), Edward Markey (D-Mass.), James Scheuer (D-N.Y.) and Henry Waxman (D-Calif.).
"It is particularly important that the mere allegation of financial hardship . . . not be the basis for the granting of a temporary waiver if the commission has no basis to believe that there will be greater diversity in the ownership of these properties following a waiver period," the letter said. Wirth has previously raised questions about "marketplace protectionism" in FCC policies.
Fowler "is not living up to his commitments . . . . the possibility of hearings is definitely on the horizon," one Capitol Hill source said. Bryant has introduced a bill that would require the FCC to hold public hearings on waiver requests, and Sen. Thomas Eagleton (D-Mo.) has called for hearings on Murdoch's whole application.
Relaxing ownership restrictions could lead to eliminating the rule altogether, argues Henry Geller, director of the Washington Center on Public Policy Research. "That's a disaster, nothing is more important to the public interest than to have these mass media of such importance in different hands."