FCC Proposes More Deregulation ... But Not For Radio

Why Not Radio?

The FEDERAL COMMUNICATIONS COMMISSION has agreed to loosen its consolidation rules -- but not for radio. BUSINESS WEEK reports that the COMMISSION has proposed easing limits on one owner holding a television station and newspaper in a top-20 U.S. market -- but existing caps on TV and radio station ownership will stay the same.

"The public interest is best served by these modest, incremental changes to our rules," the agency said in its notice on the proposed rule.

Approval of the FCC action may spur acquisitions, increasing the value of media companies. It already helped GANNETT CO.,a bit. The owner of TV stations and newspapers such as USA Today saw its stock price rise 1% to $13.39 yesterday.

"The consolidation of media assets in the same market would lower costs for these businesses and would make them more profitable," NEEDHAM & CO.'s LAURA MARTIN told the magazine. "Consolidation would give them a better ability to compete."

This is the FCC's second attempt change in cross-ownership rules in the past four years. Last July 7th, a U.S. appeals court vacated an 2007 FCC rule that would let one owner hold a daily newspaper and a broadcast station in the largest markets, ordering the FCC to reconsider its decision. CBS CORP., CLEAR CHANNEL COMMUNICATIONS INC., GANNETT, MEDIA GENERAL INC. and COX ENTERPRISES INC. had challenged that 2007 FCC order because it didn't deregulate their industries enough..

Reactions?

Predictably, the respective interests help opposing views on the FCC's new action.

Rep. EDWARD MARKEY (D-MA), who is on the HOUSE ENERGY AND COMMERCE COMMITTEE that oversees the FCC, complained that "Loosening ownership rules could enable the type of media consolidation that would make CITIZEN KANE look like an underachiever, This cannot be allowed to happen.”"

"The already dwindling number of smaller and independent media owners will be swallowed up by the same media giants that have crushed local journalism, killed local radio and left us with the same cookie-cutter content," non-profit FREE PRESS Pres./CEO CRAIG AARON added.

On the other side, TRIBUNE CO. VP/Government Relations SEAN SHEEHAN said,"This will be very helpful for us. It’s an opportunity to remake the case."

"The thought used to be a publisher and broadcaster in the same market would have too much influence over public information, GABELLI & CO SVP/Research BARRY LUCAS, said. "While that may have been the case, with the Internet and cable TV, the dynamics have changed in terms of where you get your news and opinion. Newspapers have become much less meaningful, and you don’t need to wait for the 6p. newscast to get an idea of what’s happened."

“The bottom line is it is absolutely essential that the ownership rules be changed," NORTHWESTERN UNIVERSITY’s MEDILL SCHOOL OF JOURNALISM Dean JOHN LAVINE concluded

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