FCC MAY MODIFY COMMON OWNERSHIP RULE

By: Todd J. Shields Newspapers Could Eventually Own More Broadcast Outlets



The Federal Communications Commission (FCC) on Tuesday said it may
modify its rule barring common ownership of a newspaper and either a
radio or television station in the same market. The commission did not
say exactly what changes it envisioned to the rule, long criticized by
newspapers that say it unfairly bars them from an increasingly
competitive broadcast market.



The FCC said it expected debate among its commissioners as it gropes
toward a new interpretation of the rule put in place in 1975. The
announcement begins a complex process, including public comment, that
leads to major changes of FCC rules.



The announcement came at the end of the commission's sweeping review of
the nation's telecommunications laws. Congress told the regulatory body
to determine whether such laws still serve the public interest, given
rapid evolutions in broadcast, cable, and other technologies.



Newspaper companies long have coveted television and radio stations.
Publishers point out that the FCC relaxed other broadcast ownership
restrictions last year, and say newspapers deserve similar treatment.



The cross-ownership rule was put into place to preserve diverse voices.
Since it went into effect, broadcast, cable, and satellite
transmissions all have proliferated. With so many voices, newspaper
executives say, cross-ownership poses no threat of stifling debate.



The issue gained added urgency early this year when the Tribune Co.
said it was buying Times Mirror Co., which publishes newspapers in
cities where Tribune owns broadcast stations. The cross-ownership rule
did not immediately affect the merger, but is expected to come into
play when the broadcast outlets apply for license renewal.



The FCC on Tuesday said the cross-ownership rule 'continues to serve
the public interest by furthering the important public policy goal of
viewpoint diversity.' However, the commission in a statement said it
'recognized that there might be situations in which the rule may not be
necessary to protect the public interest.'


The FCC indicated that in larger markets, 'sufficient diversity and
competition would remain even if a newspaper/broadcast combination were
allowed.' However, it did not lay out what size markets it
contemplated. It said it 'would examine in greater detail such
situations.'



It acknowledged that combining newspaper and broadcast operations might
allow more public affairs programming. But it said that might not
preserve voices. 'Without a diversity of ownership or editors, there
would be no real diversity of viewpoints,' the FCC said.



FCC Chairman William E. Kennard, in a separate statement, said the
cross-ownership rule 'well serves our public interest goals.' However,
Kennard said 'certain circumstances' might allow sufficient diversity
and competition even with cross-ownership. He gave as an example a
small suburban newspaper's ownership of a single radio station in a
large market. 'I look forward to a robust debate,' Kennard wrote.



The cross-ownership rule was but one of three regulations the FCC said
it might change. It also recommended easing regulatory hurdles before
mergers of broadcast networks, and modifying the administration of its
rules governing local radio markets.



Each of the five commissioners was to issue a separate statement, as is
common. In her statement, Commissioner Susan Ness dwelt at length upon
the newspaper/broadcast cross-ownership rule. She cited 'sweeping
changes' in broadcast markets since 1975, when the number of commercial
broadcast networks was three compared with the current six or seven,
cable television had yet to boom, and FM radio was relatively new. Ness
called it 'not only timely, but essential for the commission to revisit
the (rule) to ensure that it reflects contemporary marketplace
realities.' Ness questioned whether the rules should treat small
markets the same way they treat top markets like New York or Chicago.



The remaining three commissioners did not immediately comment upon the
proposed change to the newspaper/broadcast cross-ownership rule.