The nation's television stations could end up in fewer hands thanks to a ruling yesterday by the Federal Communications Commission.
Under the new rules, a single owner could control as many as two TV stations in big cities if at least eight local stations exist after the deal, and as long as one of the stations is not among the top four in that area.
The FCC also laid out the first clear rules that will help the commission determine whether an investor's stake in a station constitutes ownership.
Although some companies currently own more than one station in the same area, the purchases have been accomplished through a complex and inconsistent pastiche of waivers and temporary permits, said FCC Chairman William E. Kennard.
"We've cleaned up the mess of rules that have governed this area," Kennard said. "We have brought some coherence, certainty, and bright-line tests to an area that has been plagued with uncertainty."
The FCC action, by a vote of 4 to 1, is a response to a changing TV marketplace. The old one-station-per-city ownership rules made sense when broadcast television was the only game in town, FCC officials said. But in a world where consumers can turn to cable, satellite broadcasters or other sources for televised entertainment, the ownership rules shackled broadcasters unfairly, the officials said.
"This is a real significant step," said Barry Diller, chairman and chief executive of USA Networks Inc. "This is going to change things.
"For broadcasters and, I think, for public policy, the ability to enable broadcasters to have a more level playing field in competition with cable is a smart thing." Diller said that the investment in smaller stations would lead to improved programming and "could, over time, reverse the slide on overall viewing of broadcast television."
Lowell "Bud" Paxson, owner of independent network PAX TV, greeted the news of the FCC move with excitement. "Oh, my gosh, what do I think? I can't wait to have a glass of champagne and toast the FCC!" said Paxson, whose 73-station network will almost certainly become a prime target for buyers and investors. His company is already in talks with "strategic people," Paxson said, but "we are not going to rush into anything."
Consumer advocates have long argued that relaxing ownership rules would lead to further consolidation in the industry, squelching diversity. The industry has wanted to buy and sell stations more freely for years, said Andy Schwartzman of the activist Media Access Project; "given the political pressure that's been brought to bear, the commissioners have done a pretty good job of holding the line" with the new rules, Schwartzman said.