Old media making pitch

Firms urge FCC to ease ownership rules in '07

The nation's old-media empires are telling federal regulators that the government must relax its media-ownership regulations because the nation's new-media players have changed everything.

In a series of arguments filed Monday with the FCC, such companies as the Tribune Co., NBC Universal and CBS told the FCC that its restrictions on who can own what media property where have to be eased if newspapers and broadcast outlets are to survive in the face of cable and Internet competition.

"Four years ago, when the FCC last reviewed its broadcast-ownership rules, the YouTube.com domain name had not even been registered, the first Windows version of the audio iPod was just rolling out, Google was only a search engine, cable companies sold primarily video packages, and telephone companies sold primarily voice service," CBS wrote in its filing. "And NBC was the most popular broadcast network thanks to its high-rated sitcom 'Friends' airing in the first hour of primetime."

CBS went on to say that the intervening time has exponentially increased all the arguments media companies made to ease the rules in 2003.

"Today, just four years later, Google is preparing to acquire 18-month-old video-sharing Web site YouTube for more than $1.65 billion (which will increase Google's market capitalization by less than 2%), Apple has had its fifth-generation video iPod on the market for more than a year, and cable and telephone companies now sell packages of video, voice, broadband and wireless services. Cell phones double as TV receivers for multichannel video services operated by new entrants such as Qualcomm using broadcast-type technology on spectrum allotted to broadcasters," the company wrote. "And NBC announced last week that it was making drastic cuts in its television operations, including phasing out costly scripted dramas and comedies during the first hour of primetime."

While CBS' filing might be the most colorful, it sums up the arguments the companies made to the FCC as it undertakes a review of the rules limiting common ownership of multiple broadcast outlets and newspapers and TV stations in local markets. Monday's filings come as the commission undertakes its second stab at rewriting the media-ownership regulations.

The commission's original attempt was discarded when the federal appeals court in Philadelphia ruled that the commission failed to justify the changes. One regulation that raised a single company's audience-reach ceiling to 45% of U.S. households instead of 35% was taken off the table when Congress set the audience-reach ceiling at 39% by statute.

Tribune, a company that has experience in the joint ownership of newspapers and TV stations, argues that the regulations hamper the development of diverse viewpoints. The commission has issued waivers that allow Tribune to own TV stations and newspapers in five markets including Los Angeles.

"As the commission concluded in June 2003 after years of review, the combination of a newspaper and a television station in all but the smallest markets therefore enhances diversity and localism by fostering the production of more and better local news and public affairs programming," the company wrote. "Tribune's experience demonstrates that in every category reviewed by the FCC in its 2003 order, and especially with respect to the Internet, the proliferation of available and competitive sources of information and public discourse has increased."

In its filing, NBC Uni didn't reference its recent decision to lay off hundreds of employees in its news and entertainment divisions as it faces competition from new sources. Instead the company emphasized the cost of producing news programming.

"Rhetoric about 'big media' without analysis and discussion of the realities of providing high-production values and expensive news, entertainment and sports sought by today's media-savvy audience does not help the commission discharge its obligations to set reasoned and realistic public policy," the company said. "The commission should take into account that significant financial resources are required to meet the demands of audience for high-production-value TV programs with increasingly costly infrastructures."

Opponents of easing the regulations contend that those arguments are nonsense. To that end, a coalition of consumer-interest groups submitted more than 800 pages of comments backing up their contention, including a set of new studies that claim easing the rules would allow a handful of people to dominate news coverage in communities nationwide (HR 10/20).

"There is simply no evidence that supports permitting further media consolidation ? no justification in law, economics or social policy," said Mark Cooper, director of research at the Consumer Federation of America. "The cornerstone of the FCC's argument to relax ownership limits is that consolidation is in the public interest. The evidence to the contrary is very clear. Stations that consolidate don't produce more news, they produce less. And diversity of news and opinion from the most influential media declines. The record is clear: More consolidation hurts our democracy without any discernible benefits."
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