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Cross-Ownership Changes: Wait Till Next Year

You might say that News Corp. Chairman Rupert Murdoch was in Washington last week in search of a new “Santa Clause.” He came to ask the government's help in securing the gift of better rules on media ownership. But if that was really on his Christmas list, he will be disappointed by the FCC's filing to a court seeking its advice on how to proceed with the issue.

Murdoch spoke at a Federal Trade Commission workshop on ways to help print and broadcast journalists at a time when the advertising model is being shattered and budgets are being slashed. He said if the government is truly concerned about the health of media properties, it should get rid of the “arbitrary and contradictory regulations that could actually prevent people from investing in these businesses.” Murdoch then cited the ban on newspaper-broadcast cross-ownership as one such outdated regulation.

Murdoch believes the government needs to adapt to a new reality. Toward that end, he said, restricting cross-ownership between TV and newspapers “makes as much sense as banning newspapers from having Websites.”

But if the competitive landscape is changing at the speed of digital, as Murdoch suggests, the FCC is moving in bureaucracy time. While FCC Chairman Julius Genachowski has said he feels the media's pain and has opened the agency's own inquiry into the state of journalism, the commission won't be taking any action on newspaper-broadcast cross-ownership for many months. Genachowski also has asked the courts not to weigh in until the commission has had time to reconsider the issue.

According to a copy of a filing to the Third Circuit Court of Appeals, the FCC has advised the court that it won't reconsider its 2007 decision to loosen, rather than lift, the cross-ownership ban until next year's quadrennial review of all its ownership rules.

In a letter to the Third Circuit, FCC General Counsel Austin Schlick said the decision will be superseded by the 2010 review. He cautioned further that the current petition does not represent the views of the FCC anyway since three of the five members were not on the commission when the final order came out in 2008. Schlick's letter also mentioned that one of those commissioners, Michael Copps, voted against it.

Schlick told the court that there was a method in not getting ahead of the broader 2010 review: “It would be difficult to justify second-guessing decisions that were made based on the record in the 2006 proceeding, when Commission staff are simultaneously gathering an updated record concerning the same issues.”

For broadcasters, though, it means a further delay after years of regulatory uncertainty. The commission's ownership rules have been in some form or another of regulatory limbo since 2003, when a more deregulatory rule change by then-FCC Chairman Michael Powell was stayed by the Third Circuit after it was challenged by consolidation foes.

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