Tuesday, June 3, 2003

FCC eases limits on media ownership



By David Ho
The Associated Press

WASHINGTON - Federal regulators voted Monday to allow companies to buy television stations reaching nearly half the nation's viewers and to own newspaper-broadcasting combinations in the same city, relaxing decades-old rules against media concentration.

The 3-2 vote by the Republican-controlled Federal Communications Commission brought strong criticism from opponents, including one lawmaker who predicted an "orgy of mergers and acquisitions" putting a few giant companies in control of what most people see, hear and read.

Many media companies favored the move, saying current restrictions hindered their ability to grow and compete in a market changed by cable TV, satellite broadcasts and the Internet.

Rather than squelching diverse viewpoints and local control in news and entertainment, the companies say, freedom from old restrictions will allow them to provide better news coverage in more communities. The broadcast networks say the changes will help keep free TV alive by helping them compete with pay services for quality programming.

FCC Chairman Michael Powell said the FCC achieved its goal of "building modern rules that take proper account of the explosion of new media outlets for news, information and entertainment."

The commission's Democrats, Jonathan Adelstein and Michael Copps, said the changes give too much power to media giants. In the largest markets, a single company will be able to own up to three TV stations, eight radio stations, the cable TV system, cable TV stations and a daily newspaper.

"This is the most sweeping and destructive rollback of consumer protection rules in the history of American broadcasting," Adelstein said. He said consumers' anger "will flash as they surf through their channels only to find more sensationalism, commercialism, crassness, violence, homogenization and noticeably less serious coverage of news and local events."

Powell said after the vote that court challenges would have swept away the old rules anyway and now he is confident "the vast majority of what we've done will survive" the lawsuits he expects to be filed.

Sen. Byron Dorgan, D-N.D., a member of the Commerce Committee, was joined at a news conference by South Carolina Sen. Ernest Hollings, the committee's ranking Democrat, and Mississippi Sen. Trent Lott, the former Republican leader. They criticized the FCC vote and threatened congressional action to block the initiatives.

"There clearly now is going to be an orgy of mergers and acquisitions," said Dorgan, who called the FCC's decision "dumb and dangerous."

But Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, supported Powell, saying, "The rules correctly reflect the continuing goals of ensuring diversity and localism and guarding against undue concentration."

Others in the diverse circle of critics include media moguls Ted Turner and Barry Diller, consumer advocates, civil rights and religious groups, small broadcasters, writers, musicians, unions and the National Rifle Association.

Under the new rules, a single company can now own TV stations that reach 45 percent of U.S. households instead of 35 percent. The major networks wanted the cap eliminated, while smaller broadcasters said a higher cap would allow the networks to gobble up stations and take away local control of programming.

The FCC ended a ban on joint ownership of a newspaper and a broadcast station in the same city. Restrictions in markets with nine or more TV stations were eliminated, while smaller markets would face some limits. "Cross-ownership" still would be barred in markets with three or fewer TV stations.

Tribune Co. and Gannett Inc. were among the major newspaper-owning companies that wanted the ban lifted. Both also have broadcast holdings.

"Our readers, viewers and listeners across the country are the real winners today," Tribune President Dennis FitzSimons said. "They will benefit as we explore additional ways of enriching the content of our newspapers, television stations and Web sites."

The FCC also eased rules governing local TV ownership so one company can own two television stations in more markets and three stations in the largest cities such as New York and Los Angeles.

The agency also changed how local radio markets are defined to correct a problem that has allowed companies to exceed ownership limits in some areas.

Copps said the commission should have learned from the example of radio, which has seen shrinking numbers of independent and minority owners since deregulation in 1996.

The government adopted the ownership rules between 1941 and 1975 to encourage competition and prevent monopoly control of the media.




MEDIA OWNERSHIP RULING
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