[Infowarrior] - Plan Would Ease Limits on Media Owners

[Richard Forno]

Plan Would Ease Limits on Media Owners
By STEPHEN LABATON
http://www.nytimes.com/2007/10/18/business/media/18broadcast.html?ei=5065&en
=3587dbb202bd2dcc&ex=1193371200&partner=MYWAY&pagewanted=print

WASHINGTON, Oct. 17 ‹ The head of the Federal Communications Commission has
circulated an ambitious plan to relax the decades-old media ownership rules,
including repealing a rule that forbids a company to own both a newspaper
and a television or radio station in the same city.

Kevin J. Martin, chairman of the commission, wants to repeal the rule in the
next two months ‹ a plan that, if successful, would be a big victory for
some executives of media conglomerates.

Among them are Samuel Zell, the Chicago investor who is seeking to complete
a buyout of the Tribune Company, and Rupert Murdoch, who has lobbied against
the rule for years so that he can continue controlling both The New York
Post and a Fox television station in New York.

The proposal appears to have the support of a majority of the five
commission members, agency officials said, although it is not clear that Mr.
Martin would proceed with a sweeping deregulatory approach on a vote of 3 to
2 ‹ something his predecessor tried without success. In interviews on
Wednesday, the agency¹s two Democratic members raised questions about Mr.
Martin¹s approach.

Mr. Martin said he was striving to reach a consensus with his fellow
commissioners, both on the schedule and on the underlying rule changes,
although he would not say whether he would move the measures forward if he
were able to muster only three votes.

³We¹ve had six hearings around the country already; we¹ve done numerous
studies; we¹ve been collecting data for the last 18 months; and the issues
have been pending for years,² Mr. Martin said in an interview. ³I think it
is an appropriate time to begin a discussion to complete this rule-making
and complete these media ownership issues.²

Officials said the commission would consider loosening the restrictions on
the number of radio and television stations a company could own in the same
city.

Currently, a company can own two television stations in the larger markets
only if at least one is not among the four largest stations and if there are
at least eight local stations. The rules also limit the number of radio
stations that a company can own to no more than eight in each of the largest
markets.

The deregulatory proposal is likely to put the agency once again at the
center of a debate between the media companies, which view the restrictions
as anachronistic, and civil rights, labor, religious and other groups that
maintain the government has let media conglomerates grow too large.

As advertising increasingly migrates from newspapers to the Internet, the
newspaper industry has undergone a wave of upheaval and consolidation. That
has put new pressure on regulators to loosen ownership rules. But
deregulation in the media is difficult politically, because many Republican
and Democratic lawmakers are concerned about news outlets in their districts
being too tightly controlled by too few companies.

In recent months, industry executives had all but abandoned the hope that
regulators would try to modify the ownership rules in the waning days of the
Bush administration.

³This is a big deal because we have way too much concentration of media
ownership in the United States,² Senator Byron L. Dorgan, Democrat of North
Dakota, said at a hearing on Wednesday called to examine the digital
transition of the television industry.

³If the chairman intends to do something by the end of the year,² Mr. Dorgan
added, his voice rising, ³then there will be a firestorm of protest and I¹m
going to be carrying the wood.²

Supporters of the changes say that the rules are outdated and that there is
ample empirical evidence to support their repeal. A small number of media
companies, including The New York Times Company, are able to own both a
newspaper and a radio station in the same city because the cross-ownership
restrictions, which went into effect in 1974, were not applied
retroactively.

Mr. Martin faces obstacles within the agency to overhauling the rules. One
Democrat on the commission, Michael J. Copps, is adamantly opposed to
loosening the rules. The other, Jonathan S. Adelstein, has said that the
agency first needs to address other media issues, including encouraging
improved coverage of local events and greater ownership of stations by
companies controlled by women and minorities.

Advisers to Mr. Martin said he hoped to gain the support of at least one of
the Democrats, probably Mr. Adelstein, but Mr. Adelstein said in an
interview on Wednesday that Mr. Martin¹s proposed timetable was ³awfully
aggressive.²

Three years ago, the commission lost a major court challenge to its last
effort, led by Michael K. Powell, its chairman at the time, to relax the
media ownership rules. The United States Court of Appeals for the Third
Circuit, in Philadelphia, concluded that the commission had failed to
adequately justify the new rules. Mr. Martin¹s proposal would presumably
include new evidence aimed at fending off similar legal challenges.

Mr. Powell¹s effort, which had been supported by lobbyists for broadcasters,
newspapers and major media conglomerates, provoked a wave of criticism from
a broad coalition of opponents. Among them were the National Organization
for Women, the National Rifle Association, the Parents Television Council
and the United States Conference of Catholic Bishops.

The agency was flooded with nearly three million comments against changing
the rules, the most it has ever received in a rule-making process.

Since the appeals court struck down the deregulatory changes, the commission
has continued to study the issues at a leisurely pace, and it held a series
of hearings around the nation. It had not made any new proposals, and
industry executives had not expected the agency to move again so soon.

But in recent days, Mr. Martin has proposed to expedite the rule-making and
hold a final vote in December. In part, he has told commission officials, he
was reacting to criticism by Mr. Copps about temporary waivers that have
allowed companies to own newspapers and stations in the same market.

Mr. Zell has said he wants to complete his $8.2 billion buyout of Tribune
Company by the end of the year. Tribune had been granted what were supposed
to be temporary waivers to the rule to allow it to control newspapers and
television stations in five cities: New York, Chicago, Los Angeles, Hartford
and the Miami-Fort Lauderdale area.

Mr. Copps, who for years has waged a campaign against media consolidation,
said that it would be hard for the commission to proceed during an election
year because media consolidation has provoked deep public skepticism in the
past.

He said Mr. Martin¹s proposal to complete a relaxation of the rules in
December would require procedural shortcuts, giving the public too little
time to comment on the proposals and industry experts too little time to
weigh their impact on news operations.

³We shouldn¹t be doing anything without having a credible process and
nothing should be done to get in the way of Congressional oversight and more
importantly, public oversight,² Mr. Copps said in a telephone interview from
London. ³We¹ve got to have that public scrutiny. That was one of the big
mistakes that Mr. Powell made, and he was taken to the woodshed by the Third
Circuit. I fear it is déjà vu all over again.²