FCC Proposes to Rescind Media Cross-Ownership Ban

Keep up with the latest developments and legal issues in the telecommunications and emerging technology sectors, with exclusive access to a comprehensive collection of telecommunications law news,...

By Paul Barbagallo  

The Federal Communications Commission has proposed rules that would allow one company to own a newspaper and a broadcast television station in the same market.

The FCC enacted similar rules in 2007 under Republican Chairman Kevin Martin, but the U.S. Court of Appeals for the Third Circuit in July remanded that decision because the agency did not give the public enough time to comment. The agency had at that time allowed for 28 days, instead of the usual 90.

Under the new rules proposed by Democratic Chairman Julius Genachowski, the FCC would leave in place key portions of the 2007 rulemaking, namely the elimination of the 35-year-old ban on cross-ownership of newspapers and broadcast TV stations.

If given final approval by the FCC, there would now be a presumption that in the 20 largest U.S. markets, such cross-ownership is in the public interest if a “diversity of information sources” remains and if the television station involved is not one of the four top stations in the market.

The Newspaper Association of America and the National Association of Broadcasters have supported lifting the ban, arguing that the internet, as well as cable and satellite TV channels, has made the FCC's cross-ownership rule irrelevant. In response to the release of the notice of proposed rulemaking, the NAB suggested that lifting the ban could even save journalism jobs.

Commissioner Michael Copps, the senior Democratic member of the FCC who will leave the agency at the end of the year, issued a dissenting statement. He criticized the proposed rules as too close to those put forth by Genachowski's Republican predecessors, Martin and Michael Powell. Copps said the proposed rules would ultimately threaten diversity and localism in media.

“In the vast majority of cases, I do not believe that newspaper-broadcast cross-ownership advances the public interest,” said Copps, a longtime opponent of media consolidation. “It means fewer voices in the community, less localism in the industry, and steep transactional costs that all too often lead to down-sized or shuttered newsrooms and fired journalists. Our media, and our public policy, need to head in a different direction. A media that more effectively nourishes genuine civic dialogue is necessary to successful self-government.”

Continuing, he added: “In the ten-plus years that I have been at the commission, we have witnessed dramatic media industry consolidation, to say nothing of the extensive concentration that occurred during the preceding twenty years.”

Upon release of the Notice of Proposed Rulemaking (NPRM), consumer groups raised similar concerns that lifting the cross-ownership ban would place too much power in the hands of large companies.

“It appears that the FCC is proposing to adopt the same loophole-ridden scheme that the Bush Administration FCC had tried to push through,” said Andrew Jay Schwartzman, senior vice president of the Media Access Project. “The public understands that excessive concentration of media ownership is bad for democracy, so we expect to convince the FCC to take a stronger position in the end.”

While the FCC is proposing to lift the cross-ownership ban, it would not repeal its TV duopoly rule, which limits the number of local TV stations one company can own in a single market.

The FCC commissioners voted to issue the NPRM “on circulation,” rather than at a public meeting. This allowed Copps to vote on the item before he leaves the commission. The final vote was 3-1.

The commission did not issue an official statement at BNA's press time. The agency is not expected to vote on final rules until April, sources said.

The proposed rules stem from the commission's 2010 quadrennial media ownership review, which was supposed to be completed in 2010 but stalled as the FCC awaited the Third Circuit's decision.

By Paul Barbagallo  

Request Tech & Telecom on Bloomberg Law