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FCC Releases New Media Ownership Rules

BY Admin  July 3, 2003 at 12:00 PM EST

By a 3-2 vote along party lines, the Republican-controlled FCC approved new media ownership rules that ease longtime restrictions on the number of newspapers, television outlets and radio stations that one company can own in specific markets and nationwide.

The new rules will allow a single corporation to purchase up to three TV stations in the largest markets, such as New York City and Los Angeles, and up to two television stations in most markets. Consequently, individual broadcast entitites, such as Disney Corporation’s ABC and Viacom Inc.’s CBS, can increase their reach until they own television stations that serve 45 percent of the country, a marked increase from the old 35 percent limit.

The final version of the rules largely reflect FCC Chairman Michael Powell’s principle assertion that the decades-old ownership limits needed to be updated to account for the technological changes of today’s marketplace.

In a statement released Wednesday, Powell welcomed the FCC’s decision as “building modern rules that take proper account of the explosion of new media outlets for news, information and entertainment, rather than perpetuate the graying rules of a bygone black and white era.”

The 257-page document also addressed concerns that the relaxed ownership rules would lead to greater media consolidation and fewer alternative voices.

“In short, to assert that cross-owned properties will be engaged in profit maximizing behavior or that they will provide an outlet for viewpoints reflective of their owner’s interests is merely to state truisms, neither of which warrants government intrusion into precious territory bounded off by the First Amendment,” the FCC said in its report.

Commissioners who backed the relaxed ownership rules largely echoed Powell’s remarks.

“Factors such as rapidly improving technology and innovation have contributed to a media environment that is continually evolving-and considerably different from the one when most of the broadcast ownership rules were first adopted,” FCC Commissioner Kevin Martin said in a statement.

Martin pointed to the increase of media sources, including radio stations, satellite television, and cable and broadcast networks, as presenting consumers with more choices for news and entertainment. The commissioner in particular hailed the Internet for bringing greater diversity to the media landscape.

“[T]he growth and popularization of the Internet has dramatically changed how people receive and distribute information. The Internet represents a significant outlet for diverse views, as well as an important source of news and information to consumers. As a result, people today have access to more information than at any time in our history,” he said.

But, the two Democrats on the commission — Michael Copps and Jonathan Adelstein — reiterated their vehement opposition to the relaxed rules in individual statements.

“I am convinced this is the wrong decision. It is wrong for the media industry, wrong for the public interest and wrong for America,” Copps said in his statement.

“We’ve now heard from nearly 2 million people, almost all opposed to the decision,” Adelstein wrote in his 39-page statement. “Yet we march ahead with our new rules. Now is the time for the FCC to reconsider the rule changes on its own in recognition that it acted against the public interest.”

The rules will now be published in the U.S. Federal Registry, within the next two to three weeks. Barring any action by Congress or the courts, the rules will likely take effect some 30 days after appearing in the register, when media companies will be able to seek new mergers and acquisitions.

However, the FCC report already faces strong challenges from Congress and special interests groups, who argue the new rules will lead to media consolidation and squelch equal access for smaller and alternative media firms.

“The [FCC] has paved the way for increased consolidation by our nation’s largest media conglomerates. This decision will likely result in the expansion of the biggest media corporations into local communities through the purchase of the most popular local broadcast stations and dominant local newspapers across the country,” Gene Kimmelman of the Consumers Union said in a press statement.

Kimmelman also said the Consumers Union may take legal action to roll back the rules, unless they are overturned by Congress, or revised by the commission.

“[W]e will continue to ask Congress to prevent such consolidation from occurring. We also intend to seek court review of the FCC decision given that the Commission has applied inconsistent reasoning to benefit large media owners. We believe the court will find the FCC’s actions incompatible with regulatory fact-finding and will reject the Commission’s reasoning,” Kimmelman said.

Lawmakers are also preparing to challenge the FCC’s rules.

On June 19, the Senate Commerce Committee approved a bill that would roll back several provisions of the FCC rules. Specifically, the bill would reinstate the ban on newspaper-television cross-ownership in the same market and reimpose the 35 percent cap on the number of U.S. households a single broadcast company can reach.

Though the bill — S. 1046 — gained bipartisan support in the Senate committee, the proposed legislation may face greater resistance when introduced to the full Senate and House.

Commerce Committee member Sen. Byron L. Dorgan (D-N.D.) said Wednesday that he would invoke the Congressional Review Act in an attempt to reverse the FCC’s rules when Congress returns from holiday recess on July 7 — in addition to supporting the Senate bill.

“These new rules are wrong headed and will result in more consolidation and less competition in broadcasting,” Dorgan said in a statement released Wednesday.

Dorgan said the Congressional Review Act presented another avenue for Congress to nullify the FCC’s vote.

The seldom-used Congressional Review Act authorizes Congress by joint resolution to nullify regulatory agencies’ rules.

Prior to the publication to the FCC’s report, several lawmakers and a diverse coalition of organizations — ranging from the Consumers Union to the National Rifles Association — sharply rebuked the FCC for refusing to publicly release its report before the commissioners’ final vote June 2.