FCC Media Ownership Rules Update

MEDIA OWNERSHIP RULES UPDATE
Martin Releases Proposed Media Ownership Rule Change
- Copps/Adelstein reaction
- Dorgan reaction
- Impact on Tribune deal
- NAA, MAP, Free Press, Common Cause, Tribune, Gannett reaction
- Commentary

MARTIN RELEASES PROPOSED MEDIA OWNERSHIP RULE CHANGE
[SOURCE: Federal Communications Commission]
Federal Communications Commission Chairman Kevin Martin proposes that the Commission conclude its review of the broadcast ownership rules by adopting the regulatory that would allow a newspaper to own one television station or one radio station in the same local market -- but only in the very largest markets and subject to certain criteria and limitations. Chairman Martin also proposes that the Commission make no changes to the other media ownership rules currently under review. Under the new approach, the Commission would presume a proposed newspaper/broadcast transaction is in the public interest if it meets the following test: 1) the market at issue is one of the 20 largest Nielsen Designated Market Areas (“DMAs”); 2) the transaction involves the combination of a major daily newspaper and one television or radio station; 3) if the transaction involves a television station, at least 8 independently owned and operating major media voices (defined to include major newspapers and full-power commercial TV stations) would remain in the DMA following the transaction; and 4) if the transaction involves a television station, that station is not among the top four ranked stations in the DMA. All other proposed newspaper/broadcast transactions would continue to be presumed not in the public interest. The Commission would consider the following factors in evaluating whether a particular transaction was in the public interest: 1) the level of concentration in the DMA; 2) a showing that the combined entity will increase the amount of local news in the market; 3) a commitment that both the newspaper and the broadcast outlet will continue to exercise its own independent news judgment; and 4) the financial condition of the newspaper, and if the newspaper is in financial distress, the owner's commitment to invest significantly in newsroom operations. The Chairman invites public comment on his proposals. Comments should be filed in MB Docket No. 06-121 by Dec. 11, 2007.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-278113A1.pdf

• Martin Proposes Limited Lifting of Newspaper-Station Cross-Ownership
  http://www.broadcastingcable.com/article/CA6500397.html?rssid=193

• FCC chief recommends easing some media ownership rules
  http://www.usatoday.com/printedition/money/20071114/fcc14.art.htm

• FCC Chief Offers New Plan on Cross-Ownership
  http://www.washingtonpost.com/wp-dyn/content/article/2007/11/13/AR200711...

• Martin: Cross-Ownership Vote Would End Media-Ownership Proceeding
  "I am not seeking further ownership changes in the television-duopoly rules or the radio-ownership caps," FCC Chairman said in a call with reporters Tuesday. He made a distinction between those rules "and the newspaper rule" saying they were significantly relaxed in the mid-1990s, "but that the newspaper rule has never been relaxed. That puts it in a completely different light than the other rules for which relief has already been provided."
  http://www.broadcastingcable.com/article/CA6500662.html?rssid=193

Copps/Adelstein reaction

1) The top 20 markets account for over 43% of U.S. households. Even on its face, this proposal directly affects over 120 million Americans. 2) The Chairman then creates a loophole that Big Media will drive a truck through, permitting a newspaper-broadcast combination in any market in the country. We have seen how loosely the Commission has granted waivers in the past. If this proposal goes through, the FCC could grant cross-ownership applications in such small towns as Meridian, Mississippi and Bend, Oregon. When big conglomerates can't get their way in a general rule, they press for loopholes that swallow the rule, and they would succeed with this approach. 3) The non-top four stations that major newspapers will now be competing for are precisely the stations more likely to be owned by small, independent broadcasters. If we ever got serious about women and minority ownership, these are also the stations most available to them. Chairman Martin's rule pretty much reserves these outlets for the big guys. So this proposal actually perpetuates the shamefully low levels of minority and female media ownership.
http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-278142A1.doc
* FCC Democrats Diss Martin Plan, Say Tribune Is Being Held Hostage
http://www.broadcastingcable.com/article/CA6500708.html?rssid=193

Sen Dorgan vows to Stop FCC "Rush to Judgement"
The FCC Chairman "has yet to make the case for why any further media consolidation is necessary. Indeed, he is relying on an assumption that newspapers are doomed and that cross-ownership is necessary to save them. I believe this is not the case. He has also failed to make the case that cross ownership will be beneficial to local communities -- that requires an understanding of how ownership affects local coverage."
http://dorgan.senate.gov/newsroom/record.cfm?id=287330
* Dorgan Opposes Martin's Cross-Ownership Proposal
http://www.broadcastingcable.com/article/CA6500462.html?rssid=193

Tribune Deal

• Tribune Could Get Temporary Cross-Ownership Waivers
  In an interview with reporters, Chairman Martin said he could not speak directly to the Tribune situation, but he made his points nonetheless. He did not commit to interim waivers -- Tribune has said that it needs them by mid-November to make an end-of-the-year closing date for its deal to sell the company to an employee group and investor Sam Zell. But he did suggest that they were a possibility.
  http://www.broadcastingcable.com/article/CA6500652.html?rssid=193

• FCC media ownership plan would allow cross-ownership in large markets
  At present, cross-ownership of newspapers and broadcast properties exist in eight of the top 20 markets. In No. 3 market Chicago, where Tribune owns the Chicago Tribune, it likely will not have to choose between WGN-TV-Ch. 9 and WGN-AM 720. The proposal would cover Tribune's combinations in No. 1 market New York, No. 2 Los Angeles and No. 16 South Florida. In Hartford, Conn., the No. 29 designated market area according to Nielsen Media Research, Tribune would be required to divest some of its properties, which include the Hartford Courant newspaper as well as Fox affiliate WTIC-TV and CW affiliate WTXX-TV.
  http://www.chicagotribune.com/business/chi-071131fcc-ruling,0,4188483.st...

• FCC chief's proposal may impact Tribune sale (Associated Press)
  “We’re not going to grant waivers pending the rulemaking,” said Chairman Martin, adding that “we want to make sure any transactions aren't impacted by the timing of the vote."
  http://chicagobusiness.com/cgi-bin/news.pl?id=27114

• FCC Plan on Media Ownership May Ease Tribune Deal
  http://online.wsj.com/article/SB119496706655391432.html?mod=todays_us_pa...

• Tribune future hinges on FCC
  http://www.latimes.com/business/printedition/la-fi-fcc14nov14,1,55474.st...

Reaction

• Few Friends for Proposal on Media
  Media ownership consolidation critics say Martin's proposal contains loopholes that could lead to widespread consolidation. At the same time, however, the newspaper industry’s main trade association and an executive at the Tribune Company separately criticized the plan and said it would not go nearly far enough to help them. Unless Congress intervenes, Martin appears to have the votes at the commission to have the rules adopted next month.
  http://www.nytimes.com/2007/11/14/business/media/14media.html?ref=todays...
  (requires registration)

• Newspaper Chief Sturm: Martin Didn't Go 'Nearly Far Enough'
  Newspaper Association of America President John Sturm said Martin's media ownership proposal would not be sufficient to ensure the vitality of newspapers and availability of local news that Martin said he was trying to help preserve. “As we have said repeatedly for the past 10 years, the record at the FCC supports full and complete repeal of this outdated rule. As the chairman noted, even the court in 2003 agreed that, ‘Reasoned analysis supports the commission’s determination that the blanket ban on newspaper-broadcast cross-ownership was no longer in the public interest.’” He added, “The radical and irreversible market changes that have occurred in every community since this rule was adopted more than 30 years ago have extinguished any basis for this across-the-board ban.”
  http://www.broadcastingcable.com/article/CA6500672.html?rssid=193

• Martin: Let’s Ease TV-Newspaper Rule
  Media Access Project President Andrew Schwartzman: “It’s not as modest as Martin seems to be letting on. It greatly liberalizes the policy for granting waivers in all 210 markets in the U.S.” A TV-newspaper combination today would need to demonstrate that one of the properties is a “failing” business in order to qualify for a waiver, Schwartzman said. Martin, he added, has proposed four factors that the FCC would consider when evaluating a waiver from the new rule. The FCC does not have direct control over the newspaper industry. Thus, a TV station in any market can buy the largest newspaper and hold the property for up to eight years. When the station’s license comes up for renewal, the FCC can force the sale of the newspaper. But during the eight-year holding period, the TV station can use the time to lobby Congress and the FCC for a waiver. “I would call it a shortcoming,” Schwartzman said.
  http://www.multichannel.com/article/CA6500646.html?rssid=196

• Martin’s New Rules Are Corporate Welfare for Big Media (Free Press)
  "Chairman Martin’s lofty rhetoric talks about saving American newspapers and ensuring a diversity of voices. But the devil is in the details. His new rules appear to be corporate welfare for the largest media companies in the biggest cities. The proposed rule has no mention whatsoever of the core policy issues the FCC has failed to address -- the impact of consolidation on local programming, minority ownership and the quantity of local news across the market. Perhaps most worrying of all, the proposed rules appear to contain a giant loophole that could open the back door to runaway media consolidation in nearly every market. Martin is ignoring overwhelming opposition from the public and Congress to yet another massive giveaway to Big Media.”
  http://www.freepress.net/press/release.php?id=301

• FCC’s proposed rule changes run counter to the public’s interest (Common Cause)
  "Chairman Martin’s plan to allow increased media consolidation goes against everything the public has been asking for,” said Bob Edgar, president of Common Cause. “Ask any person on the street and they will tell you that the media is not serving the public sufficiently now. Allowing fewer companies to own more of the media is just going to make this worse. The American public needs diverse sources of news, if we are to be able to be educated participants in our democracy,” Edgar said. “The FCC has not dealt with the lack of minority and women in media ownership. The FCC has not dealt with the quality and quantity of local programming and news. But now they propose to allow big corporations to get bigger while decreasing the diversity of news sources. When is the FCC going to consider what is in the public’s best interest instead of what is in the corporations’ best interest?"
  http://www.commoncause.org/site/apps/nl/content2.asp?c=dkLNK1MQIwG&b=194...

• Tribune Chairman FitzSimons: Can't Tell How FCC Cross-Ownership Proposal Will Influence Zell Deal
  In a memo to Tribune employees, Chairman and CEO Dennis FitzSimons said FCC Chairman Martin's proposal to ease cross-ownership rules in only America's biggest markets is too little for the company -- and may present "challenges" as the Chicago media giant attempts to close its going-private deal led by real estate mogul Sam Zell.
  http://www.editorandpublisher.com/eandp/news/article_display.jsp?vnu_con...

• Gannett says media ownership plan not enough
  Gannett said on Tuesday that a Chairman Martin's proposal to relax rules restricting what media companies own is too limited. "Gannett agrees that the newspaper/broadcast cross-ownership ban must be changed, but today's proposed rule is far too limited and does not reflect the realities of the marketplace," the company said in a statement.
  http://uk.reuters.com/article/technology-media-telco-SP/idUKWEN254420071...

Commentary

• Your FCC At Work (Marty Kaplan)
  [Commentary] "In the most bizarre example yet of GOP corporate welfare, FCC Chairman Kevin Martin has taken to the op-ed page of the New York Times to propose that -- in order to save the newspaper industry -- big-city papers should now be permitted to purchase a television or radio station in their market. His rationale is breathtaking. To appreciate it, you first have to set aside some inconvenient truths. Like the finding of one of the FCC's own studies of localism (a quality that the law mandates the FCC to encourage) -- a study suppressed because they didn't like the results -- that television stations with distant owners (like, say, corporations that own chains of newspapers) do a worse job at localism than locally-owned stations. Or the finding of another FCC study that radio-newspaper cross-ownership "is associated with significantly less news coverage" on the radio station. Or the analysis of the FCC's own data that shows that cross ownership leads to less total newsgathering in a market, because the other stations realize they can't compete on news, so they focus on sports, weather or something else, like freeway chases or celebrity crime. You also have to ignore the underlying economic facts of the newspaper industry, which totally undermine Chairman Martin's "endangered species" argument. But just put all that out of your mind, and focus instead on the nub of his argument: the reason that newspapers should be allowed to own television or radio stations is that those broadcast outlets are cash cows. And just why are they so profitable? Chairman Martin doesn't connect these dots."
  http://www.huffingtonpost.com/marty-kaplan/your-fcc-at-work_b_72387.html

And don't forget...

Presidential Election Could Alter Shape of Tribune-Times Mirror Deal
[SOURCE: New York Times 3/20/2000, AUTHOR: Stephen Labaton]
In 2000, during another race for US President, then-Gov George Bush's aides quietly promised industry executives and lobbyists that a Bush administration would move swiftly to eliminate the Federal Communications Commission's newspaper-broadcast cross-ownership rule. ''We have been assured through reliable channels that the governor would support repeal of the rule,'' said John F. Sturm, the president and chief executive of the Newspaper Association of America. At the time, the Tribune Company's merger with Times Mirror was pending and the fate of three of Tribune's largest television stations and three of Times Mirror's largest newspapers were in the balance. Shaun Sheehan, Tribune's top lobbyist in Washington, said he, too, had heard that the governor's policy advisers had said Gov Bush would repeal the rule. Echoing the position of the broadcast industry's lobbyists, aides to the governor's presidential campaign say they believe the rule is out of date, since consumers can now get information from a wide array of sources that include the Internet and cable and satellite television.
http://query.nytimes.com/gst/fullpage.html?res=9800E6D8133AF933A15750C0A...
(requires registration)