FCC WRANGLING OVER MEDIA OWNERSHIP BEGINS ON 8TH FLOOR

A 200-page sheaf of documents proposing to ease ownership restrictions on U.S. broadcasters was sent to each of the FCC’s 5 commissioners late Mon., setting off what promised to be 3 weeks of wrangling over how new ownership rules might shape the country’s media landscape. Several agency and industry insiders said this much was clear: On some big items -- national ownership and newspaper-broadcast cross-ownership, for example -- there already were at least 3 votes in favor of loosening the rules, all of them Republican. A vote is expected June 2.

As for the rules themselves, sources said at least 3 of the 6 being considered would be eased significantly. However, FCC sources who had seen a copy of the bureau’s report stressed that none of the rules was being eliminated entirely, despite predictions to the contrary by agency critics and despite the fact that agency attorneys believed retaining rules would be tougher to defend in court than the alternative of eliminating them. And no one doubted that, whatever the FCC ultimately decided, it would be taken to court.

Agency insiders pointed out that, technically speaking, because some of the rules were on remand from the U.S. Appeals Court, D.C., there currently really were no rules, so the agency actually would be enacting rules where there were none. On the national TV ownership cap, which was adopted in 1941 and says networks can own TV stations reaching no more than 35% of the national audience, sources said that would rise to 45% but that there was wiggle room that would allow for negotiation among the commissioners in the coming weeks. On the duopoly rule, which generally bars one owner from holding 2 stations in a market, sources said that would be loosened. Currently, an owner can have more than one in a market where there at least 8 independent “voices,” but sources said that threshold would drop to 6 and that the number of stations a single owner could have would depend on the overall size of the market.

On the newspaper/broadcast cross-ownership ban, while industry sources predicted it would “go away,” FCC insiders who saw the proposal said it would be eased but not eliminated. The dual TV network rule, which restricts the major TV networks from buying one another, will remain in place, FCC sources said. Although rules governing local radio ownership are largely out of the FCC’s hands because of their easing by Congress in the 1996 Telecom Act, sources said the radio market definition would be changed to prevent future anomalies that currently allowed some companies to own nearly all stations in some markets. The NAB has fought mightily against that change.

Comr. Copps’ office Mon. clarified comments he made last week on whether the public should have an opportunity to see the new rules before they were adopted (CD May 12 p1). A spokesman said Copps had “zero intention” of releasing a copy of the Media Bureau proposal to the public because of an agency rule barring him from doing so. Instead, Copps would like to convince his fellow commissioners that the agency as a whole should release a copy of the proposed rules in the interest of giving the public an opportunity to comment, another spokesman said.

Also Mon., the Consumer Federation of America and Consumers Union presented a report that they said showed local TV and newspaper markets already were highly concentrated. Gene Kimmelman, CU’s senior dir.-public policy, said merging a dominant local newspaper with a major local TV station would be “dangerous to our democracy because it combines the key watchdogs who keep an eye on each other, and point out each other’s abuses in the market or in their reporting.” Applying a standard used by the Justice Dept. in its merger reviews, the CFA/CU analysis examined media markets in the home states of the members of the Senate Commerce Committee, which has oversight over the FCC. The study found 1/3 of the cities essentially were one-newspaper towns and that every newspaper market and virtually every local broadcast TV market already was highly concentrated, which the DoJ defines ad a market with fewer than 6 equal- sized competitors. The report said national programming markets were concentrated, as defined by Justice as markets with fewer than 10 equal-sized competitors.