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Tuesday, December 18, 2007

FCC Relaxes Cross Media Ownership Rules

The The Federal Communications Commission (FCC) voted today to relax media ownership restrictions despite objections from some consumer groups and threats from some U.S. Senators to revoke the action.
The FCC vote, 3-2, along party lines will relax restrictions on a 32 yr. old ban on ownership of a print and broadcast outlets (cross-media) in a single market.

FCC Chairman Kevin Martin approved the controversial rule change which was made at the agency's monthly public meeting, stating "We cannot ignore the fact that the media marketplace is considerably different than it was when the newspaper broadcast cross-ownership was put in place more than 30 years ago."

Since 1975, the FCC has banned the common ownership of a daily newspaper and TV or radio station in the same local market. The rule had prospective effect, meaning combinations in existence were grandfathered by the agency.

Other changes in the rule would allow allow a company in the 20 largest markets to own both newspaper and a television or radio stations.

Restrictions: For a company to own both newspaper and television or radio station, there must be at least 8 media outlets in that market and if it involves a television station it cannot be one of the four largest stations in that market.

The rules as they apply now do not allow cross-ownership, although many companies have a waiver from that ban which allows them to do so.

On Monday, December 14, 2007, 26 Senators signed a letter that was sent to FCC Chairman Kevin Martin, which stated "It is customary to provide a reasonable period for comment when proposing rule changes in order to allow the American people an opportunity to review, understand and comment."

The Senate Commerce Committee had previously passed legislation asking Martin to defer the December 18, 2007 action.

The further go on to state in the aforementioned letter " We believe you have shortchanged the comment process and you have not completed a full review of localism prior to forcing a vote on a rule change dealing with media ownership limits."

The letter also informs Martin they will move legislation that will revoke and nullify the proposed action.

The FCC has background on this issue, titled the 2006 Review of the Media Ownership Rules, where they show that in June of 2006, the sent out a news release (PDF file), "FCC Opens Media Ownership Proceeding for Public Comment", seeking public comment on the "Further Notice of Proposed Rulemaking" (Referred to as "Further Notice"), explaining that they were seeking public comment on how to address the issues raised by the U.S.Court of Appeals for the Third Circuit in Prometheus v. FCC, (PDF file of the courts opinion) and also to start the comprehensive quadrennial review of all the media ownership rules, as required by statute.

(Side Note: Congress in 2004 amended the frequency of these periodic ownership reviews from once every two years to once every four years.)

Since 2007, the Commission has held six public hearings in geographically diverse locations around the country, the last of which was held in Seattle, Washington on Friday, November 9, 2007.

Topics included but were not limited to: Localism; Competition; Diversity; Minority ownership; Children’s and family-friendly programming; Senior citizens; Religious programming; Independent programming; Campaign and community event coverage; Music and the creative arts; The growth of the internet; Jobs and the economy; Advertisers; Rural America; The disabled community.

In a February 2002 decision, the U.S. Court of Appeals for the D.C. Circuit sided with media companies, including Fox, NBC, Viacom, and the National Association of Broadcasters, against the FCC. The organizations had claimed the FCC exceeded its own authority and violated the First Amendment and the Administrative Procedure Act; the court agreed, saying "We conclude that the Commission's decision to retain the rules was arbitrary and capricious and contrary to law. We remand the national television station ownership rule to the Commission for further consideration, and we vacate the cable/broadcast cross-ownership rule because we think it un- likely the Commission will be able on remand to justify retaining it."

A few months later, in April 2002, the same appeals court reached a similar conclusion in the Sinclair Broadcast Group v. FCC case. In that case as well, the court tossed the old rules back to the FCC, saying: "We hold that the commission has failed to demonstrate that (the rule) is not arbitrary and capricious."

This history is to show that this is not a new battle, not the first nor will it be the last time this controversial issue will be discussed.