MEDIA CURRENT: END TO CROSS-OWNERSHIP RULES?

by
in Columns
on Jan 4, 2012

,

In December 2011, the Federal Communications Commission (FCC) voted 3-2 to propose loosening media cross-ownership rules relating to a television or radio station and a newspaper.

Under the new rules, cross ownership of a newspaper and either a television or a radio station would be allowed in the top 20 markets such as New York, Los Angeles, Chicago, Philadelphia, San Francisco-Oakland-San Jose, Dallas-Ft. Worth and Boston. The FCC isn’t expected to vote on the final rules in April 2012 at the earliest.

Cross ownership rules were originally intended to limit media concentration particularly with regard to broadcast stations, cable stations, newspapers and websites.

In 2007, the FCC attempted to revise the 35-year-old ban on companies owning TV stations and a local newspaper in the country’s top 20 markets, saying it was no longer needed.  However, a federal appeals court lifted in the FCC plan, sending the back to the FCC for more consideration. Last year, FCC Chairman Julius Genachowski defended the agency’s earlier attempt to loosen cross-ownership rules, so the recent proposal did not come as a surprise.

According to the FCC, “the public interest is best served by these modest, incremental changes to our rules.” It believes the proposed rule strikes a proper balance to restrict media consolidations by including two limitations. First, it limits TV station participation to stations not among the top four ranked in the market. Second, it requires that there be at least eight independently owned and operating major media outlets remaining after the transaction is completed.

The FCC plan does not propose lifting what is know as the “duopoly rule” that limits the number of local TV stations a company can own in a single market. (However, in December 2011, the National Association of Broadcasters [NAB] appealed to the Supreme Court to take a case in an effort to strike down the duopoly rule.)

The FCC’s decision raised the ire of many Democrats in Congress. Sen. Byron Dorgan (D-ND) led a bipartisan group of 25 senators to have the FCC delay its vote, insisting that the public hadn’t had enough time to consider the proposed rule changes.

Rep. Edward Markey (D-MA), who sits on the House Energy and Commerce Committee that oversees the FCC, criticized the plan. “Loosening ownership rules could enable the type of media consolidation that would make Citizen Kane look like an underachiever,” he said. “This cannot be allowed to happen.”

The strongest critic was FCC Commissioner Michael Copps, whose term was up at the end of 2011. In a statement, he reminded his fellow commissioners and the American public that “in a country now nearly one third minority, it is shocking and I think embarrassing, that people of color own barely more that 3 percent of full-power commercial television stations.”

Watch out for a 21st century Citizen Kane.

* * *

David Rosen is a writer and business-development consultant. He is author of the indie classic, Off-Hollywood: The Making & Marketing of Independent Films (Grove), originally commissioned by the Sundance Institute and the Independent Feature Project.  He can be reached at [email protected]. For more information, check out www.DavidRosenWrites.com and www.DavidRosenConsultants.com.