F.C.C relax media ownership

F.C.C. Eases Media Ownership Rule By STEPHEN LABATON WASHINGTON — By the narrowest of margins, the Federal Communications Commission adopted proposals by its chairman to tighten the reins on the cable television industry while loosening 32-year-old restrictions that have prevented a company from owning both a newspaper and a television or radio station in the same city. Last month the chairman, Kevin J. Martin, suffered a setback when he was unable to find two commissioners to support his proposal to more tightly regulate cable television. But in a highly contentious meeting on Tuesday, Mr. Martin re-established control when he became the pivotal vote on two rules that could significantly reshape the nation’s media landscape by determining the size and scope of the largest news and cable companies. In one 3-to-2 vote, he sided with the agency’s two other Republicans to relax the newspaper-broadcast cross-ownership rules in the 20 largest markets. As part of that order, the commission also granted dozens of permanent waivers of newspaper-broadcast combinations in large and small markets that had been given temporary waivers as they awaited the outcome of the rulemaking. In a second 3-to-2 vote, Mr. Martin joined with the two Democratic commissioners to impose a limit that would prevent the nation’s largest cable company, Comcast Communications, from growing much larger. Under that rule, no company can control more than 30 percent of the market. Analysts say that Comcast is close to that limit. Mr. Martin has said that a relaxation of the ownership rules was a modest, though vital step toward assisting the newspaper industry as it struggled financially as advertising and readership migrates rapidly to the Internet. He has been critical of the cable television industry for raising rates far greater than the rate of inflation and for failing to offer consumers enough choices in subscription packages. “We cannot ignore the fact the media marketplace is considerably different than when the media ownership rule was put in place more than 30 years ago,” he said of the newspaper-broadcast rule. The dissenting commissioners complained strongly about the outcome. Michael J. Copps, a Democratic commissioner who has led a nationwide effort against relaxing the media ownership rules, said the rule was nothing more than a big Christmas present to the largest conglomerates. “In the final analysis,” Mr. Copps said, “the real winners today are businesses that are in many cases quite healthy, and the real losers are going to be all of us who depend on the news media to learn what’s happening in our communities and to keep an eye on local government.” “Despite all the talk you may hear today about the threat to newspapers from the Internet and new technologies, today’s order actually deals with something quite old-fashioned,” Mr. Copps said. “Powerful companies are using political muscle to sneak through rule changes that let them profit at the expense of the public interest.” And Robert M. McDowell, a Republican commissioner, was sharply critical of the cable restrictions. “The cap is out of date, is bad public policy and is not needed in today’s public market,” he said. He called the cable rule “archaic industrial policy” that would surely be struck down by an appeals court, as an earlier rule was six years ago. Although Mr. Martin appears to have won a high-stakes battle within the commission over some of the most important proposals of his tenure, he has expended significant political capital and made political enemies of powerful industry groups and influential lawmakers. For opposite reasons, both proposals approved on Tuesday have been criticized by industry. The Newspaper Association of America has attacked the proposal for being too modest, and said that Mr. Martin did not go far enough. “Today’s vote is only a baby step in the actions needed to maintain the vitality of local news, in print and over-the-air, in all communities across the nation,” the president of the Newspaper Association, John F. Sturm, said. “Eliminating the cross-ownership ban completely would enhance localism by enabling broadcasters to increase local news and would not distract from the diversity of viewpoints available to local audiences.” The cable television industry has said it has repeatedly been an unfair target of Mr. Martin, and that his efforts to regulate the industry are at odds with the broader policies of the Bush administration to remove or lessen regulations. Over the last year, the commission has approved a series of proposals over the objections of the cable television industry, including one last December to force municipalities to accelerate the local approval process for the telephone companies to offer video services in new markets. Another one last October struck down thousands of contracts that gave individual cable companies exclusive rights to provide service to an apartment building. Consumer groups, which have long pushed for tighter cable television regulation, were split over the media ownership rules. Some were relieved that it did not go nearly as far as they had feared and that Mr. Martin tightened a loophole by making it more difficult for companies to get exemptions from the rules in smaller markets. Other groups were critical because they said the rule could open the door to further consolidation and a decline in the diversity of voices on the airwaves. Moreover, a significant chorus in Congress has been deeply critical of Mr. Martin and repeatedly requested that he delay action on the media ownership vote. Earlier this week, 25 senators led by Senator Byron Dorgan, Democrat of North Dakota, sent Mr. Martin a letter in which they vowed to take legislative action to revoke any new rule or nullify Tuesday’s vote. But the administration expressed support for Mr. Martin. In a significant victory for the newspaper and broadcast industries, Mr. Martin has signaled that he will not use the new rules to force any companies that already have waivers or exemptions to sell some assets. Some companies, including The New York Times Company, have been able to own both a newspaper and a radio station in the same market under permanent waivers because they held both properties before the restrictions were imposed in 1975. Others have been granted what are supposed to be temporary waivers while the agency considered how to rewrite the rules. Under Tuesday’s order, 42 newspaper-broadcast combinations that had previously been granted temporary or grandfathered exemptions will not be forced to sell any assets to comply with the new rule. Both the newspaper-broadcast ownership rule and the cable rule are certain to be reviewed by federal appeals courts. Three years ago, a federal appeals panel in Philadelphia struck down a series of deregulatory measures proposed by Mr. Martin’s predecessor, Michael K. Powell, including one that loosened the cross-ownership rules. The court said that the agency had the authority to relax the rules, and that it also had the authority to impose some limits on ability of a conglomerate to own both a newspaper and a television or radio station in the same city. But the judges also concluded that that the commission had not provided a reasoned analysis to support the limits that it chose. The court has continued to hold the case and asked the commission to report back to it once it reconsidered the rules. The cable concentration caps, as they are known, have long been the subject of debate and litigation at the commission. Six years ago a federal appeals court in Washington struck down a rule that was similar to the one adopted on Tuesday. The three-judge panel concluded that the commission had failed to provide an adequate justification to overcome the First Amendment rights of the cable companies. But commission officials said that they had provided a different justification for the new rule, which they hoped would pass court muster.