The Federal Communications commission on Tuesday eased restrictions on the ability of newspaper companies to own television and radio stations in the same market, by a 3-2 vote.
After the vote becomes effective, newspapers would be allowed to own stations within the 20 largest broadcast markets. Mergers of newspapers and broadcast stations would still be allowed in smaller markets, although subject to some regulatory constraints.
Since the so called “cross-broadcast” ownership rule was put in place in 1975, newspapers have been barred from owning a radio or television stations unless such combinations existed prior to the rule’s application, or subsequently received a waiver of the rules.
The vote to ease the newspaper ownership restrictions split the commission on party lines, with the Republicans voting for the measure, and the two Democrats offering stinging dissents. The action, and the comments by the commissioners, was a sign of the politically controversial nature of media ownership in recent years.
“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,” said FCC Chairman Kevin Martin.
“Back then, cable was a nascent service, satellite TV did not exists, and there was no Internet,” Martin continued. “Indeed, the [newspaper rule] is the only rule not to be updated in the past three decades, despite the fact that FCC chairmen, both Democrats and Republicans, have advocated doing so.”
“Today’s decision would make George Orwell proud,” said FCC Commission Michael Copps, a Democrat. “We claim to be giving the news industry a shot in the arm — but the real effect is to reduce total newsgathering.”
“The FCC has never attempted such a brazen act of defiance against the Congress,” said Jonathan Adelstein, a Democrat. “Like the Titantic, we are steaming ahead at full speed, despite repeated warnings of danger. This effort may yet sink. We should have slowed down rather than putting everything at risk.”
Still, Martin’s action on Tuesday was a much more limited step than had been attempted by previous chairman Michael Powell. Unlike Powell, who attempted to ease a variety of restrictions on both newspaper and broadcast companies, Martin focused exclusively on easing the so called “cross-broadcast” ownership rule.
As described by agency staff and the commissioners, the FCC will now allow all cross-broadcast applications within the top 20 markets as long as eight major media sources remain and, if the proposed combination includes a TV station, it is not among the top four stations.
For proposed combinations in the markets 21 and smaller, there would be four additional considerations: the level of media concentration in the market, a showing that the combination will increase the amount of news, a commitment to continue separate editorial teams, and a commitment to invest in news.
But media companies would be able to circumvent these additional considerations if owners can demonstrate that their businesses are failing.
As part of the decision, the agency also legalized 42 newspaper-broadcast combinations. Of those, 36 had been “grandfathered” under the 1975 regulation, and six of those combinations have been pending since 2001. Gannett and Media General are among that later group of companies seeking to combine more recently.
“With an order modernizing [media-ownership rules], you want to minimize the divestitures that would come about” as a result of the agency’s action, said FCC Commissioner Robert McDowell, a Republican who supported the change, speaking after the vote.
Powell’s June 2003 effort, which also passed on a 3-2 party-line vote, was thwarted by Congress and a federal appeals court.
The Tuesday action was in response to the decision by the June 2004 decision of the Third Circuit Court of Appeals, which reversed Powell’s rules and remanded the proceeding back to the FCC.
Critics of media consolidation took aim at Martin’s decision to press forward with the decision.
“Martin is ignoring the public will and defying the U.S. Senate,” said Josh Silver, executive director of Free Press, an advocacy organization seeking stiffer media ownership rules. “His decision to gut longstanding ownership rules shows once again how the largest media companies — with their campaign contributions and high-powered lobbyists — are corrupting the policymaking process at the expense of local news coverage and independent voices.”
During the FCC’s meeting, Martin took the Democratic commissions’ dissents in stride. He questioned their premise that the rule was the result of a flawed agency process.
“I have attempted to respond to the legitimate issues for public comment,” Martin said, and at “each step along the way, the goal posts were moved.”
“I have come to the conclusion that it won’t ever be possible to reach consensus on the media ownership issue,” Martin concluded. And yet the agency “must respond to the court remand and to Congress, and we must provide certainty to the media industry. In sum, it is time for us to act, and today is the time.”