- The Washington Times - Monday, June 2, 2003

The Federal Communications Commission is expected to vote today to ease the rules that have kept the nation’s media conglomerates from growing larger.

The five FCC commissioners have indicated they will vote 3-2 to ease the restrictions, including lifting the 28-year ban on owning a newspaper and television station in the same city and loosening the criteria to allow companies to own two or more television stations in one city.

Despite the hoopla surrounding today’s vote, the final decision on the ownership rules probably will rest with the courts.

A broad coalition of conservative and liberal organizations, including the National Rifle Association and the National Organization for Women, have joined forces to criticize the plan, saying further industry consolidation would reduce local news and the diversity of viewpoints.

Small groups of demonstrators have been marching across the nation in protest. In Los Angeles last week, about 60 people marched outside a Clear Channel Communications Inc. radio station with signs reading, “No choice, no voice: Reclaim our airwaves.”

The outcome is not likely to please either side, virtually guaranteeing legal challenges in the U.S. Court of Appeals.

Several members of Congress have vowed to introduce legislation to preserve the rules, although it is not clear whether they would have the votes to reverse the FCC’s expected decision.

Chairman Michael K. Powell and the commission’s two other Republican members are expected to vote for the relaxed restrictions. The two Democrats on the panel have indicated they will vote against the proposals.

“What happens [today] isn’t the end of the process. It’s just the beginning. They should call this thing the Lawyer Salvation Act of 2003, because it’s going to spend four or five years in the courts,” said Bethesda media analyst Gary Arlen.

W. Kenneth Ferree, the FCC’s Media Bureau chief and a primary architect of the revised rules, told Reuters news agency: “The likelihood is high there will be a court challenge. But we have facts and a really good record with lots of evidence for these rules.”

Mr. Powell said yesterday that he did not believe that relaxing the rules would result in massive consolidation of media companies.

“I think you’ll see some restructuring, but I happen to personally believe not nearly as much as some of the alarmist rhetoric would suggest,” Mr. Powell said on ABC’s “This Week” program. “Just because somebody can buy something doesn’t mean it makes strategic or financial sense to do so.”

The regulations were created between 1941 and 1975. Media conglomerates say they are outdated in the era of the Internet, satellites and cable television, and have called on the FCC to ease the rules or eliminate them.

One reason the FCC is revising its restrictions is the appeals court’s scathing criticism of the agency for not justifying the need for the rules nor where the limits were set, Mr. Ferree said.

Relaxing the rules could set off another wave of consolidation in an industry dominated by a few companies, including Viacom Inc., parent of the CBS and UPN broadcast networks and a host of cable networks, and Clear Channel, the nation’s largest radio owner, with about 1,200 stations.

For consumers, the relaxed rules could mean fewer companies controlling local broadcast and print news.

Consider Washington, the eighth-largest television market in the nation, according to Nielsen Media Research Inc.

NBC owns its Washington-area affiliate, WRC-TV (Channel 4), and Fox owns the Fox station, WTTG-TV (Channel 5), and the UPN affiliate, WDCA-TV (Channel 20). Networks are eager to own as many stations as possible, so neither NBC nor Fox is likely to sell its Washington affiliate, analysts say.

Local banking magnate Joe L. Allbritton and his family own the local ABC affiliate, WJLA-TV (Channel 7) and sister cable station NewsChannel 8. The Allbrittons are not likely to sell the stations, but they would be interested in taking advantage of the relaxed rules to buy local newspapers or radio stations, according to knowledgeable industry executives.

McLean-based Gannett Co., owner of USA Today, owns the local CBS affiliate, WUSA-TV (Channel 9), and Tribune Co., owner of the Baltimore Sun, owns the WB station, WBDC-TV (Channel 50).

These companies could swap their local stations for stations in cities where they publish newspapers, analysts said. The Washington Post Co., which owned WUSA until the late 1970s, also could be interested in the stations, analysts said. Similarly, NBC or Fox could purchase WUSA or WBDC if it wanted to operate multiple stations in the Washington area, analysts said.

A spokesman for The Washington Post did not return telephone calls Friday. A Gannett spokeswoman said the company is interested in acquiring more stations but declined to discuss specifics.

“If you own the local newspaper and a local TV station, or if you own several TV stations in one market, that’s a lot of editorial heft,” said Mark D. Hughes, an industry analyst for investment group SunTrust Robinson Humphrey.

Some companies, such as Tribune, have said they would move aggressively to take advantage of relaxed ownership rules. Others are waiting on the sidelines.

In testimony before the Senate Commerce, Science and Transportation Committee last month, international media mogul Rupert Murdoch, whose vast holdings include the Fox broadcast and cable networks, said he does not plan a buying spree if the restrictions are eased.

Viacom and Mr. Murdoch’s company, News Corp., have lobbied the FCC to eliminate the rule that prevents a network from owning television stations that collectively reach 35 percent of the national audience. The FCC is poised to raise the limit to 45 percent.

In addition, the agency is expected to allow companies to own multiple television stations in the same city after the appeals court questioned the formula the FCC uses to count voices in a market.

The FCC previously allowed one company to own two stations in a single market if eight other station owners remained. The agency is expected to reduce that figure to five.

The agency is also expected to ease a restriction that allows one company to own a television station and as many as seven radio stations in one city, and it is likely to redraw maps that determine how many radio stations one company can own in a single market, making the areas smaller.

The FCC is expected to preserve a rule that prevents one of the largest four television networks from buying one of the other top four.

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