FCC Proposal Eases Media Ownership Rules

A blueprint for easing media ownership rules began circulating among commissioners on the Federal Communications Commission (search) on Monday, which would make it even easier for a company to own multiple television stations, people familiar with the situation said.

A majority of the five FCC commissioners are also planning to let a company own a newspaper and a television or radio station in most markets as well as ease the cap on how much of the national TV audience one company can reach.

Specifically, the FCC is considering a tiered system somewhat similar to what is used in antitrust law to determine whether a company can own several television stations in a market, sources said.

But there would have to be at least six television stations in a market before the agency would allow a company to own two stations there, and one could not be in the top four in the ratings, they said.

So in many markets, companies will be able to own two commercial stations without running afoul with the FCC, and in large cities like Los Angeles and New York, three stations could be owned by a company under the tiered system.

FCC Chairman Michael Powell (search) hinted about his plans on May 1 when he said the rule would allow a company to own a certain number of television stations in a market based on the total number in the market.

In antitrust law, a market is considered highly concentrated when there are fewer than six competitors which would set up tough hurdles for acquisitions in that market. A market is considered to be moderately concentrated when there are six to 10 competitors in a market and acquisitions could be more acceptable.

The FCC is slated to vote June 2 on the new rules.


Originally, the agency's television duopoly rule allowed a company to own two stations in a market only if one was not one of the top four stations in the market and as long as there were eight remaining independent voices.

A spokeswoman at FCC declined to comment on the changes. FCC is revising the rules after a federal appeals court said the agency failed to sufficiently justify the regulations.

The three Republicans on the panel are largely in agreement on how to ease the limits, sources said, but the two Democrats have complained such action could harm diversity and localism.

Such an agreement among the FCC Republicans would be a victory for chairman Powell, who earlier this year lost a vote to ease regulations that required dominant local telephone carriers to share their networks.

FCC Commissioner Kevin Martin, a Republican who bucked Powell on that decision, has been cautiously optimistic that he will be able to support the revisions to the media ownership rules, FCC insiders have said.


The Senate Commerce Committee is slated to examine the issue on Tuesday, hearing from Viacom Inc. chieftain Mel Karmazin, who has pushed for relaxing the rules and the publisher of the Seattle Times newspaper Frank Blethen, who opposes doing so.

"I expect it to be a forum for a lot of concerns to be expressed about media ownership because there are a lot of concerns," said Schwab Capital Group analyst Paul Glenchur said. "I don't expect the hearing to have a huge effect."

The FCC Republicans also have coalesced around lifting the limit that prevents a company from owning television stations that in combination reach 35 percent of the national audience. The cap will likely end up at 45 percent, sources have said.

The agency is also expected to lift the ban preventing a company from owning a newspaper and either a television or radio station in all but the smallest markets. That is where an index to ensure diversity would come into play.

Tribune Co. has lobbied the FCC to ease the cross-ownership ban so it can go on a buying spree, while consumer groups and smaller broadcasters have implored the FCC not to change the rules out of fear they would be put out of business and localism would suffer.

The FCC's two Democrats have said they may seek a delay of the June 2 vote, but Powell has made it clear he would not delay it just to forestall the inevitable.