FCC Democrats put brakes on News Corp.’s station deal

May 28, 2001  •  Post A Comment

Government approval of News Corp.’s long-pending application to buy Chris-Craft Industries’ television stations could be delayed for months because top Federal Communications Commission officials have not been able to agree on what conditions to impose on the transaction, sources said.
The key controversy is what to do about News Corp.’s effort to combine its media properties in the New York market-the New York Post and WNYW-TV-with Chris-Craft’s WWOR-TV.
Earlier this month, the FCC staff recommended that the company be permitted to keep all the properties, at least pending the resolution of agency proceedings to consider relaxing a rule that currently bars broadcasters from acquiring daily newspapers in their market.
But sources said the agency’s two Democrats-Commissioners Susan Ness and Gloria Tristani-at deadline had refused to endorse the plan, and that could force FCC Chairman Michael Powell to put the deal on hold until after the Bush administration’s new FCC commissioners come on board.
Under one possible scenario, Mr. Powell could wait to vote on the issue until after Ms. Ness steps down from her agency seat, something she has said she would do by June 1.
With GOP FCC Commissioner Harold Furchtgott-Roth’s support, Mr. Powell would then have a 2-1 vote majority.
But sources warn that Ms. Tristani could simply block the vote then, a move that would score her big points with News Corp. chief Rupert Murdoch’s Democratic enemies on Capitol Hill, because a three-vote quorum is needed for any vote at the agency.
“If I were Mr. Murdoch, I’d be quaking at this point,” said one source close to the issue, adding that the impending shift in leadership in the Senate from Republican to Democrat could also mean major trouble for the News Corp. chief’s ambitions to acquire DirecTV.
If Mr. Powell opts to wait for the new commissioners to vote on the Chris-Craft deal, that could lead to a substantial delay for News Corp. because it could be months before the new crop of FCC commissioners feels comfortable enough to vote on the merger.
Also complicating the picture is that Sen. Ernest Hollings, D-S.C., who is expected to be named chairman of the Senate Commerce Committee shortly, is a strong proponent of the broadcast-newspaper cross-ownership ban.
“It seems as if Chairman Powell couldn’t get a third vote from Commissioner Ness or Commissioner Tristani,” said Andrew Schwartzman, president of the activist Media Access Project. “Now he may be waiting to get a third vote from one of the new commissioners.”
Andrew Butcher, a News Corp. spokesman, said, “We’ve said all along that we’d like to close the deal by June 30, but there’s no financial penalty if it doesn’t close on that date. We would simply hope that it gets approved as quickly as possible.”