Let Only Biggest Papers Own TV Or Radio, FCC Chairman Martin Proposes -- Gannett Knocks It

By: Mark Fitzgerald Daily newspapers should be allowed to own a TV or radio station in their markets -- but only in the biggest cities, Federal Communications Chairman Kevin J. Martin said Tuesday as he formally proposed changing the 32-year-old cross-ownership ban.

The rewrite Martin is proposing is, as his own office said in its announcement "notably more conservative in approach" than the sweeping cross-ownership rule change it proposed in 2003. That rule change was overturned by an appeals court that nevertheless endorsed the general idea that newspapers could own broadcast in their markets.

Martin's rule would allow dailies only in the top 20 Nielsen Designated Market Areas (DMAs), and would allow a paper to own either one TV station or one radio station.

There are other restrictions as well. "If the transaction involves a television station, at least 8 independently owned and operating major media voices (defined to include major newspapers and full-power commercial TV stations) would remain in the DMA following the transaction," the FCC said. Further, a newspaper could not own a station that is not among the top four ranked stations in the DMA.

Newspapers would also have to show that combining newspaper and broadcast would "increase the amount of local news in the market." Further, the TV and newspaper news operations would have to remain independent in the news judgments.

The FCC, under this rule change, would also consider the financial condition of the daily, and "if the newspaper is in financial distress, the owner's commitment to invest significantly in newsroom operations."

Gannett Co. Inc. released a statement later in the day saying it welcomed a change but Martin's idea did not go far enough.

Martin has said he want a vote on the rule changes Dec. 18. He heads a 3-2 Republican majority on the FCC, but the two Democrats have been vociferous in their opposition to striking or modifying the cross-ownership ban -- and at public hearings a large majority of speakers also vigorously opposed the changes.

The rule change comes as Tribune Co., which owns newspaper and broadcast in several markets around the country, is anxiously awaiting word on whether their regulatory waivers will be extended to allow its going-private deal headed by real estate mogul Sam Zell to close by the end of the year.

The Newspaper Association of America (NAA) expressed disappointment in Martin's "extremely limited" proposed solution to "the onerous, decades-old" cross-ownership ban.

"The fundamental issues he raises concerning the vitality of newspapers and assuring that local news remains available to the public in print and in broadcast are not confined to the top-20 markets," NAA President and CEO John F. Sturm said in a statement. "As we have said repeatedly for the last 10 years, the record at the FCC supports full and complete repeal of this outdated rule. As the Chairman noted, even the court in 2003 agreed that, '...reasoned analysis supports the Commission's determination that the blanket ban on newspaper/broadcast cross-ownership was no longer in the public interest.'"

The "media democracy" activist group Free Press blasted the proposal as "corporate welfare for the largest media companies in the biggest cities."

Free Press said the rule failed to address issues of media consolidation, minority media ownership, and the falling amount of local news across the country.

"Perhaps most worrying of all, the proposed rules appear to contain a giant loophole that could open the back door to runaway media consolidation in nearly every market," Free Press's policy director, Ben Scott, said in a statement. "Martin is ignoring overwhelming opposition from the public and Congress to yet another massive giveaway to Big Media."

In its announcement, the FCC chairman's office said the media landscape had changed considerably since the cross-ownership rules were put in place.

"Consumers have benefited from the explosion of new sources of news and information," the FCC said. "But according to almost every measure newspapers are struggling. At least 300 daily papers have stopped publishing over the past thirty years. Their circulation is down, their advertising revenue is shrinking and their stock prices are falling. Permitting cross-ownership can preserve the viability of newspapers by allowing them to share their operational costs across multiple media platforms."

It said the proposal allows cross-ownership "only in the largest markets where there exists competition and numerous voices."