Cross-Ownership Rules at Play

Last week, the Third Circuit Court of Appeals lifted its stay on the FCC’s loosening of the newspaper-broadcast cross-ownership rules. But don’t look for a land rush of broadcasters buying newspapers, say communications attorneys.

“I would be surprised if you had a lot of deals proposed,” said Jack Goodman, counsel at Wilmer Hale in Washington, “because it is limited to one broadcast station and one newspaper in a market.”

Lifting the stay means that station owners with only one property in a market could buy a newspaper, subject to FCC approval with a presumption the combination was in the public interest. One beneficiary could be Tribune, which has a single station-KTLA-and the Los Angeles Times. It holds both under a waiver of the now old cross-ownership ban, but that is time-limited. It could apply to remove that time limit. “For people in top 20 markets with waivers, it gives them a little more comfort. If they can get a permanent waiver, the pressure is off them.”

Goodman says the real upside for broadcasters is that the court is taking a second look at the commission’s approach to ownership. “They didn’t even count cable, much less broadband,” he says, in considering the diversity of media voices in a market. “They are a technological generation back.” Of course, it will be the same panel of judges that stayed the last two changes.

Former FCC Chairman Michael Powell, whose more deregulatory rule changes in 2003 prompted the first Third Circuit stay and led to his successor, Kevin Martin’s decision to only loosen the cross-ownership rule and nothing else, is hoping the court’s review of arguments leads it to a new conclusion.

“This is a new day,” Powell, now a senior advisor with Providence Equity Partners, told with B&C in an interview. “That court was originally dismissive about the Internet [in terms of a competing voice in the market], which to me was their big error. To say that this is not a substitute, or people don’t get their news from it, gets harder as the years go by.”

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.