FCC still wants some limits

May 5, 2003  •  Post A Comment

In what could turn out to be a major pain for some media companies, sources last week said a Federal Communications Commission majority appears to have decided to continue limiting the ability of broadcasters and newspapers to merge in the nation’s smallest markets.
Mergers of daily newspapers and broadcasters are currently barred in all markets under a long-standing FCC rule intended to limit the ability of media companies to dominate a region.
Major media companies with interests in both camps-led by the Newspaper Association of America and the National Association of Broadcasters- have been lobbying the FCC to kill the regulation. Conventional wisdom has long pronounced the regulation to be a goner.
But FCC sources said that as of late last week, a majority of the agency’s commissioners appeared to have set their sights on retaining at least part of the cross-ownership prohibition. Sources also said that GOP FCC Commissioner Kevin Martin is the lone voice for total elimination of the rule at the agency. The major issue still under debate is said to be exactly how and where to draw the new line June 2, when the agency is slated to vote on new ownership regulations.
An FCC vote to retain some restrictions could prove to be particularly burdensome for companies such as Media General, because 21 of its 26 TV stations are in markets 50 and smaller. Tribune, on the other hand, which has also been lobbying vigorously for deregulation, is unlikely to be affected because its media properties are in the nation’s largest markets.
At least some industry sources say they expect that the FCC deregulation will be generous enough to clear the way for mergers in more than 85 percent of the nation’s markets.
“My sense is that the overwhelming number of markets in the country will be available for newspaper acquisition of broadcast stations,” said John Sturm, president and CEO of the NAA.
It was clear at deadline the industry lobbying on the issue will continue.
“Media General’s position from the beginning has been that the rule must be repealed completely,” said Lou Anne Nabhan, Media General VP, corporate communications.
Among other things, Ms. Nabhan said more than 50 TV stations in smaller markets had pulled the plug on local news operations in recent years because they proved too expensive.
If the stations had been allowed to merge with a local newspaper, or so the argument goes, the TV news operations might still be around.
“We believe strongly that one of the best ways to ensure strong local news in communities of smaller and medium size is to allow a single company to practice good journalism across several media platforms,” Ms. Nabhan said.
Shaun Sheehan, a Tribune VP, said, “On a philosophical level, there has never been a basis for this rule and it should be abolished outright. Practically speaking, Tribune’s interests are in major markets. Given the FCC’s record, we believe major-market relief is more than warranted.”
At a recent press briefing, FCC Chairman Michael Powell told reporters that the agency will keep at least part of most of the media ownership rules that will be on the block June 2.
“There will be a son of virtually every rule that currently exists today,” Mr. Powell said.
Said Andrew Schwartzman, president of the activist Media Access Project, “It is certainly a relief to hear it’s possible that the FCC will eviscerate only some of its rules. But I’m still a glass-half-empty kind of guy.”