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NAA: FCC Rule Change Would Have Little or No Impact on Minority Ownership

The Newspaper Association of America says FCC chairman
Julius Genachowski's proposal to loosen the newspaper/TV cross-ownership rules
and lifting limits on newspaper/radio do not go far enough, but defended the
move as thoroughly vetted and said criticisms that it would harm minority
ownership are unsubstantiated.

In fact, NAA said that the change would have little or no
impact on minority ownership, or consolidation in general.

In a letter to the chairman Tuesday, NAA president Caroline
Little said the FCC proposal does not go far enough and that the rule should be
repealed in its entirety. "It makes no sense to continue to prohibit local
television stations that currently produce local news from investing in local
newspaper journalism," she said.

A number of past FCC chairs, Republican and Democrat, have
agreed the ban should go, but have pointed to pressure from Congress not to
lift it.

Little said that newspapers could hardly be considered
dominant players in the news business anymore.

"Google brought in more advertising revenue in the
first six months of this year than all printed daily and Sunday newspapers and
magazines in the United States combined," she said. "The online,
television and mobile app markets are teeming with new players, and newspapers
can no longer be seen as dominant."

She also took issue with suggestions the chairman had not
sought sufficient input on the changes. She pointed out that the initial
proposal to relax the rules was released months ago "after rounds of
comment and empirical, peer-review studies." That is the same point the
chairman's office has made in defending the decision to try and vote the item
by the end of the year, a deadline now pushed to at least early January after
the chairman agreed to extend comment on an associated biennial ownership

As to the criticism by many minority groups that the item
does not sufficiently gauge the impact of the changes on minorities and women,
Little said there was absolutely no support for the claim. She said few
minority-owned TV stations would be eligible for cross-ownership because they
are in smaller markets. "Quite simply, the FCC's modest proposal would
have little to no impact on minority ownership."

Little said that the item was unlikely to lead to many new
mergers, which in its opinion was one of the item's drawbacks. "The
proposal would bar television/newspaper combinations outside the top 20 markets
and would not allow for combinations if the television station is ranked in the
top four in a market. This is unfortunate, as top-four television stations are
far more likely to produce local news and, therefore, are logical candidates to
invest in newspapers. Lower-ranked stations that produce no local news are less
likely to make investments in local journalism. In our view, the current proposal
does not go far enough to generate much-needed investment in local

Genachowski and the other commissioners are all slated to
appear before the House Communications Subcommittee Wednesday, where they are
expected to be asked about the ownership vote and the criticism surrounding it.