FCC backs
media giantsThe rules allow firms to own
more TV stations and combinations
of newspapers and broadcast stations
WASHINGTON >> Federal regulators relaxed decades-old rules restricting media ownership today, permitting companies to buy more television stations and own a newspaper and a broadcast outlet in the same city.
The Republican-controlled Federal Communications Commission voted 3-2 -- along party lines -- to adopt a series of changes favored by media companies.
These companies argued that existing ownership rules were outmoded on a media landscape that has been substantially altered by cable TV, satellite broadcasts and the Internet.
Critics say the eased restrictions would likely lead to a wave of mergers landing a few giant media companies in control of even more of what the public sees, hears and reads.
The decision was a victory for FCC Chairman Michael Powell, who has faced growing criticism from diverse interests opposed to his move toward deregulation.
"Our actions will advance our goals of diversity and localism," Powell said. He said the old restrictions were too outdated to survive legal challenges and the FCC "wrote rules to match the times."
The FCC said a single company can now own TV stations that reach 45 percent of U.S. households instead of 35 percent. The major networks wanted the cap eliminated, while smaller broadcasters said a higher cap would allow the networks to gobble up stations and take away local control of programming.
The FCC largely ended a ban on joint ownership of a newspaper and a broadcast station in the same city. The provision lifts all "cross-ownership" restrictions in markets with nine or more TV stations. Smaller markets would face some limits and cross-ownership would be banned in markets with three or fewer TV stations.
The agency also eased rules governing local TV ownership so one company can own two television stations in more markets and three stations in the largest cities such as New York and Los Angeles.
The FCC kept a ban on mergers among the four major TV networks: ABC, CBS, NBC and Fox.
"The more you dig into this order the worse things get," said Michael Copps, one of the commission's Democrats. He said the changes empowers "a new media elite" to control news and entertainment.
Fellow Democrat Jonathan Adelstein said the changes are "likely to damage the media landscape for decades to come."
The Democrats said the new rules mean a single company can own in one city up to three TV stations, eight radio stations, the cable TV system, cable TV stations and the only daily newspaper.
The rule changes are expected to face court challenges from media companies wanting more deregulation and consumer groups seeking stricter restrictions.
The FCC also changed how local radio markets are defined to correct a problem that has allowed companies to exceed ownership limits in some areas.
The government adopted the ownership rules between 1941 and 1975 to encourage competition and prevent monopoly control of the media.
A 1996 law requires the FCC to study ownership rules every two years and repeal or modify regulations determined to be no longer in the public interest. Many previous proposed changes were unfinished or were sent back to the FCC after court challenges.
As the vote approached, opposition intensified. Critics bought television and newspaper ads, wrote letters and e-mails, and demonstrated outside television stations owned by major media companies.
Some ads took on Rupert Murdoch, whose News Corp. owns Fox News Channel, 20th Century Fox TV and film studios, the New York Post and other media properties. Murdoch told a Senate committee last month he has no plan for a media buying spree after the changes, other than his proposed acquisition of DirecTV, the nation's largest satellite television provider.
Murdoch was granted an exception to the old rules to allow ownership of a paper and TV station in New York City. The new rules also allow the FCC to grant individual waivers to the rules.
The critics of eased rules include consumer advocates, civil rights and religious groups, small broadcasters, writers, musicians, academicians and the National Rifle Association. They say most people still get news mainly from television and newspapers, and combining the two is dangerous because those entities will not monitor each other and provide differing opinions.
Large newspaper companies such as Tribune Co. and Gannett Inc. wanted the "cross-ownership" ban lifted.
"The relaxation of the rules will allow newspaper-owned broadcast stations to offer more and better local news and public service programming," said John Sturm, president of the Newspaper Association of America. "Local audiences will be the big winners."
News Corp. and Viacom Inc., which owns CBS and UPN, stand to benefit from a higher national TV ownership cap because mergers have left them above the 35 percent level. Those companies, along with NBC, persuaded an appeals court last year to reject that cap and send it back to the FCC for revision.
Lawmakers have split mainly along party lines. Democrats demand more public scrutiny of the changes while Republicans support Powell. Some lawmakers critical of the FCC have proposed legislation to counter relaxed regulations.
BACK TO TOP |
Ruling details awaited here
Honolulu has two television duopolies, in which two companies each own two stations.
The first in the nation was Alabama-based Raycom Media Inc.’s KHNL and KFVE. The second involves Indiana-based Emmis Communications Corp., which owns and operates KHON and KGMB.
The latter has been more controversial, as the two stations are among the top four in the market. At the time Emmis purchased KGMB from Lee Enterprises Inc. as part of a larger transaction, Emmis sought a waiver of rules that required it to sell one of the two stations. The new FCC rules include a waiver process that appears to apply to the Emmis duopoly.
“We’re going to reserve comments until we get the guidelines from the FCC,” said Rick Blangiardi, Emmis’ Hawaii market senior vice president. The commission issued a 10-page news release following the vote, but Blangiardi believes the actual guidelines may take a couple weeks to arrive. When they do, “we’re going to have to look at them to examine our options.”
Kate Healey, Emmis’ director of media and investor relations, said a decision will take time.
“It is too soon to tell exactly what it will mean to our ownership of KHON and KGMB. We need to study the FCC's ruling and investigate next steps. Obviously we’re committed to doing what makes the most sense to Hawaii viewers,” she said. The vote is not expected to cause any changes in the Hawaii radio market, according to Austin Vali, vice president and general manager for Cox Radio Inc. “The big change is going to be newspapers,” he said. Newspapers and television stations in the same market may now be owned by a single company, under the rule changes.
Atlanta-based Cox Radio Inc. owns four FM stations and operates a fifth under a joint sales agreement: KRTR-FM 96.3, KCCN-FM 100.3, KXME-FM 104.3, KINE-FM 105.1 and KGMZ-FM 107.9, which is owned by Florida-based Honolulu Broadcasting Inc. Also in Hawaii, Aloha Auto Auctions and Cox Aviation are owned by Atlanta-based Cox Enterprises, which is the largest shareholder of Cox Radio Inc. Cox Enterprises owns newspapers, cable and telecommunications services on the mainland.
Texas-based Clear Channel Communications Inc. owns and operates 7 radio stations in Honolulu: KSSK-AM/FM 590/92.3, KIKI-FM 93.9, KDNN-FM 98.5, KUCD-FM 101.9, KHVH-AM 830, KHBZ-AM 990. It is the maximum number of stations the company can own in Honolulu.
