FCC Loosens Newspaper-Broadcast Cross-Ownership Limits

To cries of " unfair" and "this vote is a sham" from a handful of protesters,  the Federal Communications Commission voted along strict party lines Tuesday to loosen its newspaper-broadcast cross-ownership rule.

Democratic commissioner Michael Copps was the first commissioner to weigh in with a public statement in advance of that vote, saying that the FCC was "just inking up a rubber stamp for another round of consolidation."

FCC chairman Kevin Martin called it a relatively minor change that may help to "forestall erosion of local news coverage" and only loosens the rules where there are many voices and competition.

Of Copps' frequent criticisms of the FCC process, particularly insufficient notice on the content of items, Martin said Copps participated in last-minute changes on other items and had not been critical of the process then.

Martin added that he thought much of the criticism of the process was instead disagreement on the substance, saying a lack of agreement was not the same thing as a lack of debate.

The move sets up a showdown with mostly Democratic senators who have pledged to nullify that vote, and the deicison will likely be taken to court by media activists opposing any more consolidation, or even broadcasters arguing that it has not gone far enough -- no other ownership rule was loosened, in contrast to the 2003 rule rewrite, the remand of which by a court the FCC is wrapping up.

The commission will presume that newspaper-broadcast combinations in the top 20 markets are in the public interest so long as eight independent voices, including newspapers, remain and the stations are not among the top four in the market. It will also allow newspaper-radio combinations but require no voices test.

Newspaper-broadcast cross-ownership would also be presumed to be in the public interest in markets smaller than the top 20 so long as at least seven hours of local news is added to a station that did not do it before, or if the station or newspaper is in financial distress.

The latter is defined as a station or newspaper that has gone dark at least four months before a waiver is filed for, or a station that has less than 4% of the audience, where there has been negative cash flow for at least three years (newspaper or station) and where no out-of-market buyer wants it.

Copps called the ruling a shiny gift for big media and a lump of coal for the rest. "Happy holidays," he said, adding that the change won't pass muster with either Congress or the courts.

Citing the congressional pushback, Democratic commissioner Jonathan Adelstein said the FCC "has never attempted such a brazen act of defiance against Congress. Like the Titanic, we are steaming at full speed despite repeated warnings of danger ahead. It might yet sink. We should have slowed down rather than put everything at risk."

Adelstein said three out of five unelected bureaucrats should not be able to overrule the American people, whom, he added, weighed in passionately in public hearings against consolidation. "They danced, they sang, they read us poems," he said, as well as providing expert opinions.

Martin countered that his colleagues had been quick to say no, but not to offer solutions. "They demanded that I publicize my proposal and I agreed, then they criticized me for making it public," he said, during a string of citations where he felt that his critics had asked for more, adding that the goal post was moved every time he though he had reached the goal post.

Commissioner Deborah Taylor Tate said she thought the process had been "open, transparent and thorough," and that while she would have preferred to have a unanimous decision, she didn't think waiting any longer would have resulted in consensus.

Tate advised the decision's critics to "consider the narrowness of the ban," pointing out that the commission retained all of the other limits. Many of us wanted to go much further in lifting the restircitons, she said, but opted for a "cautious approach" given "the record before us," including the views of citizens.

Republican commissioner Robert McDowell defended the vote as coming after extensive input in a years-long process and in response to a cacophany of voices competing for the nation's media attention and in the face of shrinking newspaper profits, with all of the trend lines going in the same direction. "Why should stale government industrial policy hasten their demise?" he said, calling it a "a millstone around the neck of a drowning industry."

FCC rules are expected to further the goals of competition, diversity and localism, said McDowell, adding that the rule change did all three.

Like Tate, McDowell insisted that the change was modest given those new-media realities and argued that the waiver policy was not filled with loopholes.

Both Adelstein and Copps said Martin made last-minute changes to the proposal late Monday night and they indicated that the commission was now granting waivers to 42 combinations in the dark of night. McDowell said the FCC was simply grandfathering those combinations in view of the changing marketplace that offered "boundless" opportunities to tap into media voices.

Adelstein said he liked the idea of requiring seven hours of new news programming, but he wasn't sure the FCC would enforce it.

Newsaper Association of America president John Sturm said the change was a modest chip out of the rule, but he would not help consumers in smaller and midsized markets, saying that the FCC should have eliminated the ban completely.

Josh Silver, executive director of Free Press, issued the following statement: "FCC chairman Kevin Martin is ignoring the public will and defying the U.S. Senate. His decision to gut longstanding ownership rules shows once again how the largest media companies -- with their campaign contributions and high-powered lobbyists -- are corrupting the policymaking process at the expense of local news coverage and independent voices."

He continued, "Martin's FCC relied on slanted research and a rigged process to reach today's preordained outcome -- local media wrapped in a bow for Tribune, News Corp., Gannett and all the rest."

The commission made no changes to local-radio and TV-ownership rules or the prohibition on the major broadcast networks -- ABC, CBS, NBC and Fox -- buying each other.

The vote will wrap up the media-ownership-rule review mandated by Congress and a federal court.

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.