FCC Dems: We Could Vote For Tribune Waivers -- In Just Three Days

By: E&P Staff The two Democrats on the five-member Federal Communications Commission (FCC) say they're ready to give Tribune Co. the temporary television and radio license waivers it needs to go private by the end of the year.

In a joint statement, Commissioners Michael J. Copps and Jonathon S. Adelstein say FCC Kevin Martin is using the Tribune deal to rush passage of the changes to the newspaper/broadcast cross-ownership rules he proposed on Tuesday. Copps and Adelstein have been outspoken opponents of easing or eliminating regulations prohibiting common ownership of a newspaper and broadcast property in the same market.

"We realize there is some urgency with respect to the Tribune transaction," Copps and Adelstein said. "The chairman, however, has refused to act on Tribune's waiver requests that would permit the transaction to close. Let us be clear: it is improper to hold the Tribune hostage in order to force a vote on media ownership before the end of the year. We are prepared to vote on the Tribune waiver requests within three working days after the Chairman circulates a draft decision. There is simply no excuse for using Tribune as a human shield."

Tribune Co. for more than a decade has been among the most active newspaper industry lobbyists for elimination of the cross-ownership ban. But Martin's insistence on passing a broad reform of cross-ownership instead of granting more temporary license waivers -- and his desire to get a vote by Dec. 18 -- puts Tribune in a big bind.

Tribune owns both newspapers and broadcast stations in five markets, operating either because they were grandfathered in when the 1975 cross-ownership ban was imposed, or because they received waivers from the restriction. Because the going-private deal is a change in ownership, the stations must apply for license renewals, which presumably would not be permitted under the current cross-ownership ban. As a practical matter, the deal could not go through, at least at its present value, without the broadcast properties.

Sam Zell, the Chicago real estate mogul who is leading the $8.2 billion deal to take Tribune private, wants to close the transaction by year's end to realize a possible $100 million in reduced taxes. But the company has suggested in the past it would take about two weeks to complete the paperwork for the $4.2 billion it needs for the second and final stage of the deal.

In their statement, Copps and Adelstein reiterated their opposition to Martin's plan, calling it "a wolf in sheep's clothing."

Martin's proposal would permit a daily newspaper to own either one television station or one radio station in the 20 largest markets in the nation. But the Democratic commissioners contends his proposal's provision for waivers in certain instances "creates a loophole that Big Media will drive a truck through, permitting a newspaper-broadcast combination in any market" in the country.

"We have seen how loosely the Commission has granted waivers in the past," they said. "If this proposal goes through, the FCC could grant cross-ownership applications in such small towns as Meridian, Mississippi and Bend, Oregon."

Martin's proposal also restricts daily to buying stations that are not among the four-rated stations. That rule, the Democrats said, means "that major newspapers will now be competing for are precisely the stations more likely to be owned by small, independent broadcasters."


"If we ever got serious about women and minority ownership, these are also the stations most available to them," Copps and Adelstein said. "Chairman Martin's rule pretty much reserves these outlets for the big guys. So this proposal actually perpetuates the shamefully low levels of minority and female media ownership."

The proposal is too rushed, they added, suggesting that the time for public comment should be at least 90 days.