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FCC Reviewing Ownership Limits

BY Admin  September 12, 2002 at 12:00 PM EST

The commission’s four commissioners voted unanimously on Thursday to begin a formal review process of ownership regulations in an attempt to render them more consistent and able to withstand legal scrutiny.

FCC Chairman Michael Powell called the examination “the most comprehensive undertaking in the area of media ownership in the commission’s history.”

Powell has said he expects the new rules to be more “liberalized,” despite protests from some lawmakers and consumer groups who have expressed concern that liberalizing ownership rules could someday quash smaller and local operations — and the diversity they provide.

Large media companies and their industry associations have urged the FCC to update its regulations, which they believe inhibit growth in the media industry.

The Chicago-based Tribune Co., owner of twelve daily newspapers and 24 television stations, has lobbied to ease restrictions following its acquisition of Los Angeles-based Times-Mirror Co., which gave the company newspapers in some cities where it already owned television stations.

Under current regulations, the FCC could order the Tribune Co. to sell some of its operations in key markets, like Los Angeles and New York, when its licenses come up for renewal.

“These rules are antiquated and need to be changed,” Gary Weitman, a spokesman for the Tribune Co., told the Associated Press.

Meanwhile, several industry watchdog groups, like the Consumers Union, warn that market consolidation would enable media companies to essentially control the information people receive and how they receive it. Other consumer advocates argue that lax ownership rules could prompt another wave of media mergers and ultimately stifle the diversity of information produced by smaller and local operations.

“I believe and am very concerned that [Powell] is embarking on a very dangerous course, favoring the elimination of rules with selective review of facts in the marketplace, disregarding the importance of independently-owned, separate media outlets to our democracy,” Gene Kimmelman, the co-director of Consumers Union’s Washington office, said.

Several lawmakers, including Senate Commerce Committee Chairman Ernest Hollings (D-S.C.), have opposed easing ownership limits, asserting that there has already been too much concentration within the media market.

At today’s open meeting, however, Powell said the agency “has failed to tailor and adapt its rules to the fact of the marketplace,” adding that an overhaul of the decades-old cross-ownership limits was “long overdue.”

The FCC’s formal review will examine limits on the number of television and radio stations one company can own in a single market, as well as the ban on mergers between the four major television networks.

The commission will also reexamine two rules that were rejected by an appeals court earlier this year, which concerned limits on the national audience size of companies with multiple television stations, and a ban preventing companies from owning two television stations in the same market.

The U.S. Appeals Court of the District of Columbia overturned these rules and strongly reprimanded the FCC for not adequately justifying the decisions.

Commissioner Kathleen Abernathy on Thursday agreed that the agency had “an obligation to reconcile our ownership rules.”

“The deeper you dig into our rules, the more confused you become,” she said.

Currently, two media companies — Viacom Inc., owner of the CBS and UPN networks, and News Corp., owner of the Fox network — have surpassed the limit on how much of the national television audience one company can reach, which currently stands at 35 percent. The appeals court initially ordered the FCC to reconsider this rule.

Commissioner Michael Copps, a Democrat, cautioned that the agency needed to consider what changes, if any, would serve the public interests.

“I don’t know of any issue before the commission that is more fraught with consequences for the American public,” he remarked. He said public hearings should be held in Washington and across the country.

“At stake is how radio and television are going to look in the next generation and beyond,” Copps said.

The FCC is required under the Telecommunications Law of 1996 to periodically review ownership rules in light of changes in the media industry, such as increased global competition and technological innovations.

The commission will receive public comment and study economic data over the next 90 days before drafting the new rules.

W. Kenneth Ferree, head of the FCC media bureau, said he plans to have a proposal before commissioners by spring of 2003.