FCC, on 3-2 vote, OKs media ownership rule
EmptyWASHINGTON -- Federal regulators Tuesday brushed aside the concerns of lawmakers and decided to ease the reins on media companies seeking to own newspaper and broadcast properties in the same market in the nation's 20 biggest markets.
FCC chairman Kevin Martin said the 3-2 party-line vote makes it easier for newspapers and television stations to compete with new-media outlets like the Internet that weren't envisioned when the rule was written 32 years ago.
"We cannot ignore the fact that the media marketplace is considerably different than it was when the newspaper/broadcast cross-ownership rule was put in place more than 30 years ago," Martin said. "Back then, cable was a nascent service, satellite television did not exist, and there was no Internet. Indeed the newspaper/broadcast cross-ownership rule is the only rule not to have been updated in three decades, despite that fact that FCC chairmen -- both Democrat and Republican -- have advocated doing so."
Despite the trouble newspapers are having with declining circulation and lower advertising revenue, they still play an important role in public discourse that needs to be preserved, he said.
"Without newspapers, we'd be worse off," Martin said. "Despite, at times, what they write about us."
But Democrats on the commission argued that it isn't the agency's business to help out newspaper and broadcast companies, even if they are having trouble in the marketplace.
Michael Copps, the commission's senior Democrat, called the new rule the "same old same old" that rewards big media companies by allowing them to become even more dominant.
"In the final analysis," he said, "the real winners today are businesses that are in many cases quite healthy, and the real losers are going to be all of us who depend on the news media to learn what's happening in our communities and to keep an eye on local government."
Copps was backed up by fellow Democrat Jonathan Adelstein, who called the decision a "monumental mistake."
"It is a big mistake for big government to say big media is good for you," he said.
But Republicans on the commission disagreed, calling the changes modest.
Commissioner Robert McDowell noted the explosion of new media in the modern marketplace and the agency's lengthy review.
"While I agree with many of the critics of today's order that it is not the FCC's job to 'save the newspapers,' or any other industry for that matter," he said, "at the same time is it our job to leave in place an outdated regulation that results in the elimination of independent voices? With a regulation in place that is linked to the silencing of so many local community voices, is the cross-ownership ban still in the public interest, or is it a millstone around the neck of a drowning industry? The statute demands an answer."
Under Martin's proposal, one entity would be permitted to own a newspaper and one broadcast station in the same market. But it must be among the 20 largest media markets in the nation, and following the transaction, at least eight independently owned-and-operated media voices must remain. In addition, the television station might not be among the top four in the market.
It also gave permanent waivers to the rule in 42 situations, 36 that were "grandfathered" in when the commission originally wrote the rule in 1975 and a half-dozen that have come into being since then.
It is the second time the commission has tried to ease the rule. The FCC first attempted to loosen the ban along with a number of other media ownership restrictions in 2003, but that move was rejected by a federal appeals court. Martin believes that scaling the decision down will allow him to get through judicial review.
The commission's move drew an immediate rebuke from another branch of government as lawmakers criticized the vote.
"We've got a lot of people, from both parties, as well as millions of American citizens saying, 'Hold on a minute here; don't do this,' " said Sen. Byron Dorgan, D-N.D.
Dorgan had urged lawmakers on the Senate Commerce Committee to approve legislation that would have delayed the vote at least six months. He also has threatened to introduce legislation that would repeal the FCC's decision.
"We're not done with this, not by a long shot," Dorgan said.
Martin might lack backing in Congress, but the Bush administration is standing behind him.
Commerce Secretary Carlos Gutierrez wrote to Senate Majority Leader Harry Reid on Dec. 4 opposing a Senate bill that would have delayed the vote, "or any other attempt to delay or overturn these revised rules by legislative means."
While the commission was loosening the newspaper/broadcast cross-ownership ban, it voted to keep controls on the cable industry as it capped the national audience reach for that industry at 30%.
While Martin needed the commission's Republicans to ease the cross-ownership regulation, he needed the Democrats to rein in the cable industry on a 3-2 vote.
"We did a little media consolidation this morning and limited media consolidation a little this afternoon," Adelstein said.
Martin disagreed with critics who said the two decisions are contradictory, pointing out that the commission chose not to act on several other media ownership limits like those for radio.
But that didn't cut any ice with the cable industry as many there feel that he is retaliating against cable operators for refusing to offer their services a la carte.
Comcast executive vp David Cohen said it is "perverse to see the commission approving huge mergers by the Bell companies while now telling cable companies -- who compete toe-to-toe with the Bells to offer consumers a real choice for video, Internet and phone services -- that they may not also grow larger and achieve the same efficiencies."
He said the company was "confident that the federal courts will agree that the FCC's decision is not supported by the record and that this cap is unconstitutional."